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2016 (11) TMI 1038 - ITAT KOLKATA

2016 (11) TMI 1038 - ITAT KOLKATA - TMI - Disallowance of purchases and renovation expenses - Held that:- Assessee has not been able to of fer any satisfactory explanation as regards the failure of the assesese to substantiate the claims made on account of additional purchases and renovation expenses in the revised return/accounts during the course of remand proceedings before the Assessing Officer except stating that the case of the assessee was not properly represented before the Assessing Off .....

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purchases and renovation expenses as claimed in the revised return/accounts by treating the same as bogus -Decided against assessee - Addition on account of sundry creditors written back by way of enhancement - contention raised by the assessee that the addition was already made by AO on account of sundry creditors written back on substantive basis to give effect to the order of the ld. CIT(Appeals) assed in the case of the assessee for A.Y. 2000-01 - double addition - Held that:- Although t .....

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- I.T.A. No. 848 /KOL/ 2012 - Dated:- 10-8-2016 - Shri P.M. Jagtap, Accountant Member and Shri S.S. Vishwanethra Ravi , Judicial Member For The Assessee : Shri Manish Tiwari , FCA For The Department : Shri Kalyan Nath, Additional CIT, D.R. ORDER Per Shri P.M. Jagtap, A.M. : This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-XIV, Kolkata dated 30.03.2012 for the assessment year 2004-05. 2. Grounds No. 1 & 5 raised by the assessee in thi .....

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ion was filed by him on 31.10.2004 declaring total income of ₹ 3,64,723/-. The said return was processed by the Assessing Officer under section 143(1) on 07.03.2006. Thereafter the assessee filed a revised return on 30.03.2006 showing a total income of ₹ 4,08,710/- . In order to regularize the said revised return, a notice under section 148 was issued by the Assessing Officer, in reply to which it was submitted by the assessee that the revised return filed by him on 30.03.2006 be tre .....

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inalized. The Assessing Officer, however, found that the sundry creditors in the revised accounts had not been increased by the amount of such purchases, the bills in respect of which were claimed to be received by the assessee after 31st day of March. He also noted that the gross prof it rate of 12.74% as declared by the assessee in the original account was quite comparable with the gross profit rates of A.Y. 2002-03 and 2003-04 while the gross prof it rate of 10.14% as reflected in the revised .....

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ook, which was duly audited. 5. The disallowance made by the Assessing Officer on account of purchases and renovation expenses as claimed in the revised return was challenged by the assessee in the appeal filed before the ld. CIT(Appeals) and keeping in view the submissions made by the assessee in support of his case on these issues, a remand report was sought by the ld. CIT(Appeals) from the Assessing Officer on the revised accounts of the assessee. As reported by the Assessing Officer in the r .....

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hases were not included to the sundry creditors account in the revised account if the alleged purchases were made on credit? On the other hand, if the purchases were made in cash in the said financial year, then, how he cast cash account after the end of the financial year when cash account is mandatory to keep on day to day basis as per principle of accountancy? 2. The assessee claimed that the account was maintained in the computer. It was pointed to him that when the stock book was updated wi .....

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to him for his comment. 3. The assessee claimed during scrutiny assessment proceedings that renovation of ₹ 2,23,500/- was not accounted for in the original account due to mistake and the same was incorporated in the revised account. In this connection, the question raised how he made entry in cash book after the end of financial year when cash account is mandatory to keep on day to day basis as per principle of accountancy? 4. He claimed ₹ 17/ - more under the head travelling & .....

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count after the end of the financial year? 7. Another quest ion pointed out to him about increase in drawing account in the revised balance sheet and was asked to explain how he withdrew the cash or bank after the end of the financial year. 8. The last quest ion put forward to him about change in cash balance as per revised balance sheet. It was noted that the cash balance arrived at the end of the year cannot be changed under any circumstances as the same is mandatory to keep on day to day basi .....

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n expenses were made with a motive to adjust the gain on account of sundry creditors written of f . Keeping in view these comments made by the Assessing Officer in the remand report, the addition made by the Assessing Officer on account of additional purchases of ₹ 4,02,008/- and renovation expenses of ₹ 2,23,500/- were confirmed by the ld. CIT(Appeals) treating the same as bogus. 7. We have heard the arguments of both the sides and also perused the relevant material available on rec .....

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s. It is also observed that specific and pertinent questions were raised by the Assessing Officer in respect of claims made by the assessee in the revised accounts/return on account of additional purchases and renovation expenses and no explanation whatsoever was offered by the assessee to reply or clarify the same. On the other hand, it was agreed on behalf of the assessee before the Assessing Officer that the said clams were made in order to adjust the additional income offered in the revised .....

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addition of ₹ 6,69,517/- made by the ld. CIT(Appeals) on account of sundry creditors written back by way of enhancement. 9. Keeping in view the remand report submitted by the Assessing Officer, wherein the Authorized Representative was stated to be agreed for the addition of ₹ 6,69,516/- on account of sundry creditors written back on substantive basis, enhancement not ice was given by the ld. CIT(Appeals) to the assessee and since there was no objection raised on behalf of the asses .....

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