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John Galt International Versus ACIT 19 (1) Mumbai

Addition on account of difference in purchases made - Held that:- The assessee duly reconciled the purchase of accounts. In addition to the above the assessee furnished further details and evidences to clear all the doubts which were duly considered by Ld. CIT(A) and detailed findings have been recorded, accepting the claim of the assessee that purchase are duly reconciled. - Thus, after taking into account all the facts and evidences it was held by the Ld. CIT(A) that there was no differen .....

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e course of hearing before us that Ld. DR could nor point out anything incorrect or wrong in the detailed findings recorded by the Ld. CIT(A) and therefore, we do not find any justification to make any interference in the order of the Ld. CIT(A) and the same is therefore upheld. - Decided against revenue - Disallowance made on account of 1/3rd of various expenses - Held that:- It is noted that books of accounts were produced by the assessee before the AO. But he was not satisfied with regard .....

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disallowance is directed to be deleted. - Decided partly in favour of assessee - ITA No.6781/Mum/2014 - Dated:- 29-6-2016 - Shri Amit Shukla, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Appellant : Shri R.S. Khandelwal (AR) For The Respondent : Shri Asjhar Zain V.P. (DR) ORDER Per Ashwani Taneja (Accountant Member): These cross appeals have been filed against the order of Ld. Commissioner of Income Tax (Appeals) Mumbai, {(in short CIT(A) }, dated 22.09.2014 passed agains .....

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the Ld.CIT(A) erred in holding that the Assessing Officer wrongly rejected the books of account and further in deleting the addition of ₹ 1,05,75,670/- for AY 2010- 11 towards purchases without appreciating that the assessee was unable to produce evidence in support of the purchases. 2.The appellant prays that the order of the C!T(A) on the above ground be set-aside and that of the AO be restored. 3.The appellant craves leave to amend or alter any ground or add a new ground which may be ne .....

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nt, sale account and its debtors account. On the basis of the same, the AO rejected the books of accounts and estimated the income by estimating the G.P. ratio of 15% and accordingly, addition was made in the assessment order. 3.2. Being aggrieved, the assessee filed an appeal before the Ld. CIT(A) and made exhaustive submissions to impress upon the point that, in fact, there were no discrepancies. It was submitted that the AO could not appreciate the facts properly and that is how he noted disc .....

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jected. But, in response to our query, the Ld. DR submitted that Ld. CIT(A) has given factual findings to reconcile the alleged difference in all the three areas wherein Ld. DR was not able to point out anything wrong. 3.4. Per contra, Ld. Counsel of the assessee drew our attention on various pages of the paper book as well as detailed findings recorded by the Ld. CIT(A) and argued that Ld. CIT(A) has considered all the facts and figures in detail and thereafter arrived at a correct conclusion t .....

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e order of Ld. CIT(A). 3.5. We have gone through the order of the AO as well as Ld. CIT(A) very carefully. We find that Ld. CIT(A) has carefully examined all the three issues of alleged difference as were raised by the AO in assessment order. It is noted by us that Ld. CIT(A) addressed all these issues one by one. With regard to the purchases, it is noted by us that the assessee had furnished reconciliation of purchases as under: Gross Purchase (as per purchase register including capital assets, .....

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e doubts which were duly considered by Ld. CIT(A) and detailed findings have been recorded, accepting the claim of the assessee that purchase are duly reconciled. Detailed findings of Ld. CIT(A) on the issue of alleged difference in purchase are reproduced as under: 3.3.2 I have duly considered the submission of the appellant and f ind that addition of ₹ 1,03,06,867/- on account of gross profit has been made by the A.O. on the basis of following, observations made by him: 1. Discrepancy in .....

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by the appellant. 3.3.3 The appel lant in i ts submission has stated that during the course of assessment proceedings, it has shown that purchases of ₹ 17,69,14,566/- is inc lusive of taxes and dut ies and af ter deduc t ing the taxes and dut ies, revised list was also filed before the A.O. which will show the total purchases of material at R.s.16,36,17,325/-, that is the amount debited in the P&L Account. In the reconciliation statement also, the appellant has shown gross purchases as .....

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f ₹ 16,94,47,923/-, the resultant f igure tal l ies with the purchase amount of ₹ 16,36,17,325/. debited in the P&L account and also mentioned in the order. In the said respect, I find that the .A.O. while recording in the order that the appellant vide reply dtd. 20. 12.12. has shown purchase made from 117 parties at ₹ 17,69,14,566/- excluding the purchase below ₹ 50,000/-, does not appear to be correct interpretation of the statement of purchase furnished, as the abo .....

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ned that the appel lant produced party-wise details of 117 parties. These details show the amount of net purchase, vat on purchase and purchase of 'fixed assets' and vat on f ixed assets. The total of net purchase comes to ₹ 16,36,17,325/-, and the same as in reconciliation statement. The total of VAT on purchases is ₹ 74,66,643/-, and the total of fixed assets purchased during the year is ₹ 58,30,598/- . The VAT amount on fixed assets is ₹ 6,53,461/-, which the a .....

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58,30,598). Thus, there being no discrepancy in the purchase account, the same cannot be a reason for rejection of books of accounts of the appellant. 3.7. Similarly with regard to the discrepancies noticed in sales account also it was found by the Ld. CIT(A) that same are duly tallied and in fact there was no difference; relevant findings of Ld. CIT(A) are reproduced as under: 3.3.4 The second discrepancy noticed by the A.O. is in the sale made in the F.Y. 2009-10. The AO. has observed that in .....

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ccount of the said discrepancy/observation made by him, the A.O. rejected the books of accounts of the appellant. 3.3.5. During the course of appellate proceedings, the appellant has submitted that there is no discrepancy in the books of account. The appellant has also furnished the reconciliation of sales, wherein gross sales as per Sales Register is ₹ 17,79,49,287/-, i.e. same as mentioned by the A.O. in the order which is inclusive of VAT and CST of ₹ 1,23,21,720/- and service tax .....

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noted by us that with regard to debtors also Ld. CIT(A) has found that the account are duly matched and in fact there is no discrepancy; relevant findings of his order are reproduced as under: A.O., during the course of assessment proceedings noticed that the closing balance as appearing in the in the debtors list filed by the appellant on 3.7.12 is ₹ 2,59,61,169/-. However, vide subsequent copy of ledger account filed on 21.12.12, it has been shown at ₹ 3,83,54,169/-. The AO has als .....

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the course of assessment proceedings on 21.12.12, It also explains the difference in the opening balance amount of ₹ 4,01,63,498/- as the revised ledger account and ₹ 5,25,56,498/- appearing in the original account. I, therefore, do not find that this can be one of the reasons for rejection of the books of account of the appellant. In any case, the A.O. has not established as-to how because of the said difference true and correct income of the appellant cannot be determined. 3.9. Thu .....

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while addressing all the issues that were raised by the AO and the assessee. It is further noted by us during the course of hearing before us that Ld. DR could nor point out anything incorrect or wrong in the detailed findings recorded by the Ld. CIT(A) and therefore, we do not find any justification to make any interference in the order of the Ld. CIT(A) and the same is therefore upheld. 4. In the result, appeal filed the revenue is dismissed. Now we shall take up assessee s appeal in ITA No.6 .....

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d and various explanations offered to him during the course of hearing. 3.The Appellant hereby prays that the additions made by the Income Tax Officer may kindly be deleted. 4. Appellant craves to add, alter, amend or modify any of the above said grounds of appeal till the final disposal of appeal. 5. The solitary issue raised by the assessee is with regard to disallowance made by the AO on account of 1/3rd of various expenses. The AO noted in the assessment order that assessee claimed expenses .....

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