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TMI Blog2016 (5) TMI 1096X X X X Extracts X X X X X X X X Extracts X X X X ..... account of undervaluation of closing stock. 3. Briefly, the facts of the case are that during the assessment proceedings, the Assessing Officer asked the assessee that he has not maintained stock register, in the absence of which it is not possible to verify types of items, there quantity, etc., for which reason proper gross profit cannot be calculated. Further, he pointed out that the assessee made huge purchases but no sale of bardana was shown. He further stated that the goods manufactured by the assessee at Patiala were transferred to Chandigarh and Panchkula Branches at Rs. 3,30,34,275/- and Rs. 1,12,09,160/-, the quantification of which was not possible in the absence of stock register. In response to the show cause, the assessee exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the proposition that merely because stock register is not being maintained, the books cannot be rejected, reliance was placed on a number of judgments. As regards bardana, the submissions made before the Assessing Officer were reiterated. Regarding inter branch transfers, it was stated that the probable cost is worked out by taking out from the sale price the estimated margin of profits. Since the income from all branches are assessed in the hands of the assessee, Shri Hari Gopal Singh, Proprietor, the value put in respect of stock transferred becomes irrelevant. As regards expenses like fancy packing, generator and consumables, it was stated that these items were being treated like this all along. Further fancy packs have nothing to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee relied on the order of the learned CIT (Appeals). 6. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. On perusal of the order of the learned CIT (Appeals), we do not find any infirmity in his order. The books are rejected by the Assessing Officer solely on the basis of the fact that stock register has not been maintained by the assessee. The assessee is in the business of making sweets, etc. and he has given a plausible explanation as regards non-maintenance of stock register, without rebutting his explanation, the Assessing Officer has rejected the books. As regards inter branch transfer of stock, we are in agreement with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in deleting the addition of Rs. 87,95,636/- made by the Assessing Officer on account of non- deduction of TDS under section 40(a)(ia) of the Act. 8. The Assessing Officer made disallowance of an amount of Rs. 87,95,636/- under section 40(a)(ia) of the Act observing that the assessee contracted manufacturing of packing material as per specification suiting his requirement and no TDS has been deducted on purchases so made. As regards addition under section 40(a)(ia) of the Act, the assessee submitted that the supply of packing material is not at a fixed rate but goes on varying time to time. The transaction could be termed as contract for carrying out any 'work'. The term 'work' is used in section 194C, clause (iv) to inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eting the addition of Rs. 30,98,957/- made by the Assessing Officer under section 36(1)(iii) of the Act. 12. Briefly, the facts of the case are that during the year, the assessee had given following amounts under the head loan & advances : (i) Sampuran Estates Pvt. Ltd. Rs.3,18,60,035/- (ii) Hari Gopal Singh HUF Rs.1,17,21,715/- Rs.4,35,81,750/- 13. The assessee has charged interest to the tune of Rs. 3,14,850/- only. Rejecting all the contentions of the assessee, the Assessing Officer made addition of Rs. 30,98,957/- as proportionate interest on said loans, relying on the judgment of the Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Abhishek Industries, 286 ITR 1 (P&H). 14. Before the learned CIT (Appeals), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves of both the parties, perused the findings of the authorities below and considered the material available on record. On perusal of the order of the learned CIT (Appeals), we observe that he has given his findings at pafa 6.4, which reads as under : "6.4 I have considered the submissions made. The only issue is regarding disallowance of interest u/s 36(i)(iii) of the IT Act'61. The appellant has entered into rent agreement with both M/s Sampuran Estate Pvt. Ltd. & M/s Hari Gopal Singh HUF. The transactions are supported by agreements and payments are made in terms of agreement which has not been doubted by the A.O. It is also not the case of the A.O. that the payments made are unreasonable. On the other hand, the appellant has duly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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