TMI Blog2014 (7) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... he behest of the appellant, the only remedy available with the respondent is to either file separate appeal or agitate the issue by way of cross objections in the appeal filed by the appellant impugning the disallowance or the addition sustained. Thus, no error could be pointed out by learned counsel for the respondent-assessee in the approach of the Tribunal which may warrant interference by this Court under Section 260A of the Act. The Tribunal had rightly not allowed the assessee to urge relating to disallowance of expenditure under Section 40(a)(ia) of the Act and part disallowance out of car expenses, car depreciation and telephone expenses. No substantial question of law arises. - Decided against assessee. - ITA No. 138 of 2014 - - - Dated:- 11-7-2014 - Ajay Kumar Mittal And Jaspal Singh, JJ. For the Appellant : J. S. Bhasin, Rajiv Sharma For the Respondent : -- Ajay Kumar Mittal, J. 1. This appeal has been preferred by the appellant-assessee under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 30.8.2013, Annexure A.3 passed by the Income Tax Appellate Tribunal Chandigarh 'A' Bench in ITA No.318/CHD/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re record which was not released till the assessment was finalised. As a result, there was delay in filing of the income tax return. The Assessing officer made certain additions after rejecting the books of account under Section 145(3) of the Act vide order dated 26.12.2007, Annexure A.1. The additions were on account of disallowance of cash sales made in lots as per three sale bills to unidentifiable parties, application of GP rate of 5% on enhanced sales of ₹ 2.5 crores, disallowance of expenses under section 40(a) (ia) for non deduction of TDS, disallowance out of car expenses and telephone expenses. The major addition of ₹ 37,30,300/- was made by rejecting the assessee's contention that stocks which had deteriorated because of prolonged storage for want of export orders, were sold in lots vide three cash memos against cash receipts to realize the blocked funds. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 1.10.2010, Annexure A.2, the CIT(A) partly allowed the appeal. Addition of ₹ 37,30,300/- was deleted by accepting the assessee's contention supported by judgment of the Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions arise for adjudication in the present appeal:- (a) Whether in the facts and circumstances, the addition of ₹ 37,30,300/- as unexplained sales was justified? (b) Whether the assessee was entitled to invoke Rule 27 of the Rules in the present case? 6. The Tribunal while adjudicating the issue against the assessee had noticed in its order dated 30.8.2013, Annexure A.3 that the dispute was relating to three sales bills amounting to ₹ 37,30,300/- under which alleged cash sales were made. There was no mention of any quantity sold. The name of the parties to whom the goods were sold was also missing. There was totalling errors in each bill and the mode of transportation of those goods also could not be explained by the assessee. On consideration of entire material on record, it was concluded that the genuineness of the transaction could not be established. The Tribunal was, thus, justified in sustaining the addition of ₹ 37,30,300/- as unexplained sales with the following observations:- The Assessing Officer had also sought information from the State Excise and Taxation department and as per the said information, the assessee had declared sales of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther excluded the said amount of Rs. 37,30,300/- from the sales account and adopted the sale of the assessee at Rs. 241,36,929/- ( Rs. 2,78,67,229/- - Rs. 37,30,300/-) on which GP rate was applied by the Assessing Officer to compute the estimated profits in the hands of the assessee. xx xxx xx xx xx xx xx xx 13. We have heard the rival contentions and perused the record. The assessee is engaged in the manufacturing and sale of knitted cloth. The assessee failed to furnish the return of income in time and thereafter, notice under Section 142(1) of the Act was issued to the assessee time and again and there was total non compliance by the assessee. The assessee furnished return of income declaring loss of Rs. 22,06,350/-. The sequence of events during assessment proceedings are referred to by the AO at pages 1 and 2 of the assessment order. The assessee did furnish some information during the course of assessment proceedings. The AO noted that during the year under consideration, the assessee had declared sales of Rs. 2.78 crores out of which, cash sales in lots without mentioning the quantity sold and/or names and addresses of the parties to whom sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. The lot sales made by the assessee totaling Rs. 37,30,300/- were made in cash and in the month of April 2004,without mentioning any quantity of goods sold in the relevant cash memos. The assessee has declared closing stock of Rs. 2.17 crore as on 3.3.2005. The opening stock declared by the assessee was Rs. 3.07 crores and the total purchases made during the year were Rs. 1.58 crores. The plea of the assessee before the Assessing officer was that it had ample stocks available with it and out of the said available stock, the aforesaid cash sales were made. The Assessing officer observed that if old stocks were available with the assessee where was the need to make fresh purchases to the tune of Rs. 1.58 crores and further stock of Rs. 2.17 crores has been shown at the close of the year. The AO thus questioned the genuineness of the cash sales made in the lots amounting to Rs. 37,30,300/-. The CIT(Appeals) accepting said plea of the assessee had deleted the addition. We find no merit in the order of the CIT(Appeals) in this regard. Perusal of the sales bills placed at pages 19 to 2 of the paper book reflect in the order of CIT(A) in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the credit of Rs. 37,30,300/- which the assessee has failed to discharge and in the absence of having established that the said amount relates to sale of goods, mere reliance on the three sale bills does not absolve the assessee from its onus and we find no merit in the stand of the assessee in this regard. 7. In view of the aforesaid findings, the assessee cannot derive any benefit from the judgments relied upon. The said judgments being based on individual fact situation, do not advance the case of the assessee. 8. Adverting to applicability of Rule 27 of the Rules, it would be expedient to reproduce Rule 27 of the Rules which reads thus:- 27. T he respondent may support order on grounds decided against him - The respondent though he may not have, may have appealed may support the order appealed against on any of the grounds decided against him. 9. The Tribunal noticed that by virtue of Rule 27 of the Rules, the respondent is entitled to support the order appealed against and raise defence against the appeal filed by the appellant on any of the grounds which have been decided against him but cannot invoke the said rule to claim any fresh relief which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be accompanied with Tribunal fee, where the appeal is filed by the assessee. However, where the appeal is filed by the revenue, then no appeal fee is payable. Further alongwith an application for stay of demand, fee of Rs. 500/- is prescribed under sub section (7) to section 253 of the Act. 20. The Appellate Tribunal, in order to regulate its powers and functions have formulated the Income Tax Appellate Rules, 1963. Rule 27 of Income Tax Appellate Tribunal Rules reads as under:- The respondent though he may not have, may have appealed may support the order appealed against on any of the grounds decided against him. The said rule 27 provides remedy to the respondent to support an order passed on any of the grounds decided against him. 21. The respondent by way of the said Rule 27 is empowered to support the order appealed against any of the ground decided against him. Rule 27 of the Income Tax Appellate Tribunal Rules lays down that where no appeal has been filed by any respondent he may support the order appealed against i.e. the order of the CIT(Appeals) on any of the grounds decided against him. The proposition proposed under Rule 27 of the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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