TMI Blog2016 (7) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... , purchases, opening stocks and closing stock of the assessee. The contention of the Assessing Officer that rent expenditure of 17,13,388/- was incurred out of unexplained sources is also not correct as learned CIT(A) in this respect has made a clear finding of fact and therefore, the basis which was taken by Assessing Officer for rejection of books of account is also not valid. The Assessing Officer without comparing earlier year results of the assessee applied 6% net profit rate without any basis and therefore, action of learned CIT(A) in deleting such addition is justified. Similarly, the assessee had declared the income on account of Duty drawback etc. separately in P&L account and therefore, the addition was not justified and learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 1,79,902/-, Duty drawback (Bangalore) ₹ 31,100/- and Duty drawback (New Delhi) ₹ 3,64,453/-. (iii) On the facts and circumstances whether the Ld. CIt(A) was right in deleting the addition on account of disallowance of license fees amounting to ₹ 17,13,388/-. 3. The appeal was earlier dismissed as being defective vide Tribunal order dated 20.12.2013. However, on an application filed by Revenue the said order was recalled vide Tribunal order dated 12.09.2014 as Revenue had removed the defects/deficiency and the appeal was listed for hearing on merits. 4. At the outset, the learned DR invited our attention to assessment order and submitted that the books of accounts of assessee were not reliable as the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the addition as the addition made by Assessing Officer was not based upon the facts as assessee had duly recorded the payments. 6. As regards the rejection of books the learned AR submitted that Assessing Officer had rejected the books of account merely holding that assessee had not recorded the expenditure of rent paid to Windsor Hotel Golf Course Road, Banglore whereas the fact remains that assessee had made payments through its bank account and had duly recorded the same in its books of account and therefore, the basis of rejection of books was not in existence and Assessing Officer arbitrarily applied 6% of net profit to sales without comparison with the earlier years profits the assessment of which was also made u/s 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the audit report is deficient given the fact that these do not reflect complete picture of contemporary record of financial events. Moreover the cash book was not furnished from which the purchases and other expenditures passed through the cash book could have been verified. Resultantly correct examination of contra entries could not be made. In light of the above defects in the books of accounts, the counsel was explained that provisions of section 145(3) were attracted. In light of the aforementioned defects observed in the complete books of account produced, there is no other mechanism for the undersigned to determine and assessee the true income of the assessee for the relevant assessment year than to ignore the books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not find any deficiency in the sales, purchases, opening stocks and closing stock of the assessee. The contention of the Assessing Officer that rent expenditure of 17,13,388/- was incurred out of unexplained sources is also not correct as learned CIT(A) in this respect has made a clear finding of fact and therefore, the basis which was taken by Assessing Officer for rejection of books of account is also not valid. The Assessing Officer without comparing earlier year results of the assessee applied 6% net profit rate without any basis and therefore, action of learned CIT(A) in deleting such addition is justified. Similarly, the assessee had declared the income on account of Duty drawback etc. separately in P L account and therefore, the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant has paid license fee in preceding years for ₹ 16.67 lacs and 12.98 lacs for the year ending 31.03.08 and 31.03.07 respectively. The appellant has placed before me the complete detail of payments to ITC the Windsor Hotel through its account in ICICI Bank. In view of above facts I hold that the AO has erred in making addition of ₹ 17,13,388/- on account of unexplained expenditure u/s 69C of the I.T. Act, therefore, delete the said addition. From the above findings we find that Assessing Officer made the addition without any basis and which learned CIT(A) had rightly deleted. In view of the above facts and circumstances we do not find any infirmity in the order of learned CIT(A) and therefore, the appeal filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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