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TMI Blog2016 (5) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case, the Ld. CIT(A) was wrong in dismissing the grounds of appeal against treating sale of the appellant company amounting to Rs. 3,50,000/- as cash credit and thereby he erred in confirming the action of the ld.AO who added this amount to the total income u/s 68 of the I.T. Act 1961. 2. That in the facts and circumstances of the case, the Ld. CIT(A) was wrong in dismissing the grounds of appeal against treating sale of the appellant amounting to Rs. 43,74,210/- as cash credit and thereby he erred in confirming the action of the ld.AO who added this amount to the total income u/s 68 of the I.T. Act 1961. 3. That in the facts and circumstances of the case, the Ld. CIT(A)erred in restricting the estimated disallowance of gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and treated the submission made before the CIT(A) as general in nature and confirmed the same addition made by the AO. 6. Before us, the A/R of the assessee contended that the AO examined the books of accounts and they are not rejected. The assessee produced every details of sales to the AO. The AO and CIT(A) examined and verified the details of sales and purchases. But both the authorities below did not reject assessee's accounts, sales and purchases. The assessee received the said amount through account payee cheque and referred to the page 14 of paper book. The ld. DR submitted that the assessee did not properly explain the cash credits of the said amount and relied on AO's and CIT(A)'s order. 7. Heard both representatives and peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough whom goods of fabric said to have been sold to M/s. Sreeji Traders. The AO having all the details and without examining the same and adding the addition is not justified. Therefore, the addition made by the AO which was confirmed by the CIT(A) is set aside and ground raised by the assessee on this issue is allowed. 9. Regarding the addition under section 68 of the Act as raised in the ground no.2, the AO was of the view that the assessee failed to produce the proprietor of M/s. Asia Trading for examination, on such failure, treating the sale transaction had with M/s. Asia trading as bogus and under show cause, added the amount of Rs. 43,74,210/- to the income of the assessee. 10. The ld. CIT(A) was of the view, as he expressed in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded in the books of account and these transactions led to profit to the assessee, which was brought to tax, If sales have been effected out of purchases made from these parties, then, it cannot be said that the purchases were bogus. The finding of bogus sale can only lead to the inference that the corresponding amount should be deleted from the turnover of the assessee. The AO has also not rejected the books of account to estimate profit on these transactions in case it was a firm finding that purchases and sales were bogus. The facts of the case of La Medica (supra) are different in the sense that detailed enquiries were made into the purchases made by the assessee, which were held to be bogus by the AO. It was found that the purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a/c. Address, etc. were already furnished to the AO by the assessee. In the facts and circumstances of the case, we are of the view that the addition made by the AO and confirmed by the CIT(A) is improper and unjustified. Accordingly, we delete the aforesaid addition of Rs. 43,74,210/-. 12. Ground no.3 involves a claim of Rs. 1,62,743/- as general charges. The case of the assessee is that it incurred such expenses for conducting business and wholly for the purpose of business affairs. For non-production of proper bills and vouchers, the AO disallowed @20% to an extent of Rs. 32,550/- on the basis of estimatation. 13. While dealing with issue in first appeal, the ld. CIT(A) disallowed 10% as against 20% made by the AO. 14. Before this Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as other details, ought to have been examined properly and there was no justification on the part of the authorities below to make a disallowance on account of general expenses incurred during the course of business without pointing out any material or specific defect in the self-made vouchers and other details produced by the assessee in support of its claim. ITAT Lucknow bench in the case of M/s Vijay Infrastructure Limited vs. ACIT 2015 (12) TMI 897, ITAT Lucknow held that on the basis of general observations, without pointing out even a single specific defect in the vouchers or books of accounts, disallowance on estimation made by Assessing Officer is not justifiable. The general expenses were incurred wholly for the purpose of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X
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