TMI Blog2016 (11) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned above, we are of the view that the Assessing Officer has wrongly assessed the gross / net profit of the Goa unit by comparing the profit of Murud unit. In view of the above said specific facts and circumstances, we are of the view that end of the justice would meet if the disallowance to be reduced to the extent of 50% of the above addition to the tune of ₹ 15,45,186/- Accordingly, we allow the same and the Assessing Officer is hereby directed to reduced the addition to the extent of 50% of the amount of ₹ 15,45,186/-. Accordingly, this issue has been partly allowed in favour of the assessee. Disallowance u/s.14A - Held that:- Assessing Officer did not go through the correctness of the claim. No satisfaction of any ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. The ld. CIT(A) erred in not appreciating that: (a) The Gross Profit shown by the appellant in the Goa unit was comparable and in fact better than the result shown in earlier years. (b) Maintenance of quantitative details of consumable food items running into hundreds is not practicable, as also appreciated by the Govt. of India, which grants exemption for such quantitative details, and such an exemption cannot be a ground to justify invoking of section 145(3) of the Act. (c) The ld. CIT(A) erred in failing to bring on record an comparative cases of any third party assessee, to justify the addition, and taking a different view runs contrary to the view taken by him in deciding Gr. 1 of the appeal before him. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering. The assessee was running two units vide which one unit was being run at Goa whereas the other unit was being run at Murud. The sale rate at Murud unit was much lower than the sale rate of Goa of food and beverage items. The assessee company did not keep any record of day to day consumption of food and beveragers purchased and consumed and sales made. The Assessing Officer noted the following points:- a. During the month of March 2008, the purchases at Murud were ₹ 20254/- and the sales were ₹ 1,41,042/-,i.e. the sales were seven times of purchases. b. Likewise, the consolidated figure of purchase at Murud was ₹ 7,88,846/- and sales was ₹ 27,22,237/-. Thus, the sales were 3.5 times the purchases. c. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso u/s.44AB of the I.T.Act and are subject to scrutiny by other government departments, viz., Luxury Tax and Sales Tax Officer at Goa and Murud. (iii) The AO erred in failing to make out a case as to why the G.P. shown by the appellant was not acceptable. He further erred in failing to bring on record any comparable case of any other outside assessee in the same geographical area having similar nature of business so a to justify any addition to G.P. The AO has acted on pure guess, suspicion, surmises and conjunctures to make the addition as Extra Profit. The appellant submits that the profit ratios in the two hotels i.e. Murud and Goa are different combination of turnover of food and rooms, packages tours and competition at Goa in hotel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer has wrongly assessed the gross / net profit of the Goa unit by comparing the profit of Murud unit. In view of the above said specific facts and circumstances, we are of the view that end of the justice would meet if the disallowance to be reduced to the extent of 50% of the above addition to the tune of ₹ 15,45,186/- Accordingly, we allow the same and the Assessing Officer is hereby directed to reduced the addition to the extent of 50% of the amount of ₹ 15,45,186/-. Accordingly, this issue has been partly allowed in favour of the assessee. ISSUE NO.2:- 8. Under this issue the assessee has challenged the disallowance u/s.14A of the Act. The contention of the assessee is that the disallowance u/s.14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to such income in accordance with the provision of sub-rule (2). (2) The expenditure in relation to income which does not form part of the total income shall be the aggregate of following amounts, namely:- (i) the amount of expenditure directly relating to income which does not form part of total income; (ii) in a case where the assessee has incurred expenditure by way of interest during the previous year which is not directly attributable to any particular income or receipt, an amount computed in accordance with the following formula namely:- A x B/C Where A = amount of expenditure by way of interest other than the amount of interest included in clause (i) incurred during the previous year; B= the average of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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