TMI Blog2016 (2) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... cord also speaks the same. The remand report also has not stated that there was a payment more than ₹ 50,000/- to any of the administrative staff or outsiders related to the expenses. Hence, these grounds are also not sustainable. Salary expenses disallowed - Held that:- As relates to expenditure under the head salary the assessee filed the details before the Assessing Officer and the same was not controverted by the Assessing Officer in the remand proceedings. Thus, this ground also does not sustain. Revenue appeal dismissed. - I.T.A. No. 2926/DEL/2011 - - - Dated:- 15-2-2016 - Shri J. S. Reddy, Accountant Member And Ms. Suchitra Kamble, Judicial Member Appellant by Sh. Amrit Lal, Sr. DR Respondent by Sh. Ved Jain, CA ORDER Per Suchitra Kamble, JM This appeal is filed by the Revenue against the order dated 15/02/2011 passed by Ld. CIT (A) s XVIII, New Delhi for the Assessment Year 2005-06. 2. The grounds of appeal are as follows:- 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the trading addition of ₹ 1,45,01,481/- to ₹ 10,68,331/- thereby giving a relief of ₹ 1,34, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase figure as per the appellant s book is ₹ 72,71,311/- whereas per the party confirmation the figure is ₹ 92,02,231/- thereby showing higher sales by the party of ₹ 19,30,920/- without appreciating the facts discussed in the assessment order and remand report that the total purchases from this party have been booked byte at a substantial inflated figure of ₹ 1,38,89,773/-. Thus, on the facts and circumstances of the case, the Ld. CIT(A) erred in restricting the trading addition to the extent of difference in purchases of ₹ 60445+10,00,000=10,68,331/- without appreciating the excessive amount of purchases booked in the names of above three parties by ₹ 2,01,95,369+1,03,00,973+66,18,462=3,71,14,799. 7. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the disallowance of ₹ 3,07,29,707/- made u/s 40(a)(ia) to ₹ 53,000/- only thereby giving a relief of ₹ 3,01,99,707/- without appreciating the facts discussed in the assessment order and remand report. 8. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the contention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any agent was made and that there was not liability for TDS u/s 194C thereby deleting the entire disallowance made us/ 40(a)(ia) of ₹ 6,39,195/- despite the fact that no details were furnished even during remand proceedings. 12. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the contention of the assessee that commission was directly deducted by the foreign commission agent on sales made through him and only the balance amount, net of commission, was received by the appellant and since no payment has been made by the appellant, there is no liability of TDS thereby deleting the entire disallowance made of ₹ 6,61,613/- despite the fact that no evidence in this regard was furnished even during the remand proceedings. 13. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the entire disallowance of ₹ 10,00,000/- made out of salary expenses without appreciating the facts discussed in detail in the assessment order and the remand report and the fact that in respect of seven alleged employees mentioned in the assessment order to whom salary of ₹ 4,18,000/-, ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit and loss account to ₹ 2,42,163/- disallowance of professional charges of ₹ 2,200/- disallowance of payment made to M/s Selective Placement Consultant to ₹ 10,868/- disallowance of payment relating to Shri B. K. Chabra to ₹ 53,000/- disallowance of payments made to Shri Sunil Bhattacharya to ₹ 2 lac disallowance out of professional charges to ₹ 3,50,000/- disallowance to salary expenses to ₹ 10 lacs. As relates to disallowance u/s 40(ia) the Assessing Officer submitted that there was no details filed by the assessee and if at any stage the details if filed then there will be allow ability in view of the provisions of Section 40(ia). 4. The CIT(A) as relates to Ground No. 1 to 7 categorically observed that since the duty drawback is included in the sense the drastic deduction of 12% has resulted in the lowering G.P ratio in this assessment year which was pointed out by the assessee in its profit and loss account. The CIT(A) also accepted the contention of the assessee that all payments were made through banking channels and admitted that there is a possibility of discrepancy in party accounts due to lack of proper re-conciliation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing satisfied by the documents of the assessee company, has arbitrarily adopted the G.P rate of last year and has made the impugned addition. The A.O has rejected the books of accounts of the assessee company only on the basis that the GP rate of the assessee for the current year is lower than the GP rate of the previous year. It has been submitted by the assessee and also accepted by the CIT(A) that the fall in GP rate during the year was mainly because of the fact that the assessee used to record the duty drawback as part of its total turnover and used to book the same in the sales. The rate of duty drawback, however, got reduced to 2.5% from 14.5% during the year, thereby leading to a huge reduction in the sales, which further affected the GP rate. However, the A.O has completely disregarded the above submissions of the assessee. The Ld. AR further submitted that it is a settled law that mere non satisfaction of the A.O on a particular aspect does not mean that the same can be rejected on the ground that the books of accounts of the assessee are incomplete or incorrect. Mere rejection of the GP rate adopted by the assessee, cannot be a ground to reject the books of account of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,209(-)4,07,867], leaving a difference of ₹ 7,866/-, which has been sustained by the CIT(A). (iii) Raja Fashions- The A.O has alleged that the total purchases shown by the assessee from the said party are ₹ 1, 38,89,773/-, whereas as per the reply of the party, the amount is ₹ 72,71,311/-. In this regard, the ledger account of the party in the books of the assessee company is enclosed at PB 25-31, which was submitted before the CIT (A) as well as the A.O during the remand proceedings. A perusal of the account would reveal that the purchases made by the assessee during the year are ₹ 72, 71,311/-. However, as per the reply receiveds from the party, the figure was ₹ 92, 02,231/- leaving thereby a difference of ₹ 19, 30,920/-. It was submitted by the assessee that the purchases made by the assessee have been fully confirmed by the party, however, certain additional sales have been shown, for which the assessee should not be held responsible. It was also submitted that the payments have been received by the assessee through banking channels. Therefore, considering the above facts, an adhoc addition of ₹ 10, 00,000/- was sustained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the ITAT in assessee s group of companies case held that since no amount was paid to any of the employee exceeding minimum related to attract the TDS provision, therefore, no TDS was deducted the same factual aspect has been applied here in the present case as well. 12. The DR relied upon the assessment order. 13. We have perused all the records and taken into account, contentions of both the parties from the record it can be seen that as relates to Ground No. 1 to 7, the CIT (A) has admitted that there is a possibility of discrepancies in party accounts and the same cannot be ruled out due to lack of proper reconciliation as well as the stock register was not maintained by the assessee but the CIT(A) also has given a finding that all the payments were made through banking channels and assessee has given ledger account and copies of letters of credit before the Assessing Officer. The assessee company also submitted confirmation of the parties as per the Assessing Officer s enquiry. The CIT(A) has rightly added ₹ 10 lacs and deleted the remaining disallowance. Hence, Ground No. 1 to 7 will not sustain. As relates to Ground No. 8 to 12, the CIT(A) has given a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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