TMI Blog2015 (1) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... e are fluctuations of prices in the open market. In our opinion, the above submission cannot be simply discarded. AO has adopted the short cut method without understanding the trading in the bullion and fluctuations in the market in the prices and worked out the average rate by comparing the same transaction on same dates and accordingly worked out the alleged difference. In our opinion, the approach of the AO is totally erroneous as he has totally discarded the trading in the bullion that takes place. He has also not considered the statement of the assessee that there are variations and fluctuations in the bullion market and even in the intra day transactions rate can be changed and sometimes rates may be stable and rates may swing like a wind. When the average price method is adopted, then where ever there is a lesser price paid that is also to be considered and not the excess price only. In our opinion, the average price method adopted by both the authorities is totally erroneous considering the market conditions of the bullion. Approach of both the authorities below is not correct for making high pitch additions in the hands of the assessee by invoking provisions of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making the following addition which was omitted to be added in the original assessment order although discussed in the body of the assessment order and disallowed. 2.2 Subsequently, in yet another order passed u/s. 154 of the I.T. Act on 23-01-2012 the Assessing Officer determined the total income at ₹ 73,42,67,410/- by making the following rectification: 2.3 The assessee filed an appeal before the Ld. CIT(A) who gave part relief to the assessee. So far as addition made to the trading account is concerned, the Ld. CIT(A) directed the Assessing Officer to estimate the profit by adopting the GP rate of 5.71% on turnover of ₹ 5,65,51,47,570/- thereby sustaining the addition of ₹ 21,49,93,482/-. He also gave certain relief on account of addition to the property income, difference in trade creditors, salary to drivers, depreciation on vehicles, addition made on account of difference of interest under GDS, addition on account of bogus liability, etc. 3. Aggrieved with such part relief given by the CIT(A) both the assessee as well as the Revenue are in appeal before us with the following grounds: ITA No. 532/PN/2013 (Grounds by Assessee): The f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se transactions in the group and the same were duly accounted for VAT on the transactions effected. d. The transactions were executed with the sister concerns at the market rates only and even otherwise, there was no reason to warrant a conclusion that the appellant must have sold the stocks to the sister concerns at lesser price than the market value. e. There were substantial purchases of ornaments and bullion from the sister concerns which were acquired for trading by the appellant and hence the profit margin thereon was low. There were many transactions of purchases by the appellant from the sister concerns wherein the price paid was lesser than Bombay Bullion rates and hence it could not be inferred that the appellant had reduced its profits. f. The sister concerns enjoyed the bigger bank finance limits and they could purchase gold and therefore the appellant purchased from them as on its own, the appellant would not have got the bank finance for the purchases. g. The weight gain noted in the trading account on page 53 of the CIT(A) order is not due to any defect in the accounts but it is due to the purity gain resulting in higher profits for the assessee. h. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following additions-- a. Disallowance of electricity expenses for the use for partner's residence -Rs. 81,906/- (para 31). b. Additional Disallowance of the telephone expenses - ₹ 38,012/- (Para 31.1). c. Additional electricity and telephone expenses - ₹ 1,95,184/- (para 31.2) 4.2] The learned CIT(A) failed to appreciate that the appellant on its own had made the disallowances for the use of the above assets for personal purposes in the return and the basis adopted was the same as that in the past assts. And thus, there was no reason to make further disallowances on the basis of presumptions and surmises. 4.3] The learned CIT(A) failed to appreciate that the above additions were not called for in view of the fact that the rent charged by the appellant was inclusive of the above charges. 4.4] Without prejudice, the appellant submits that the disallowances made are very high and the same should be reduced considering the past records. 5] Disallowance out of Generator maintenance expenses of ₹ 2,44,644/- (para No. 32)-- 5.1] The learned CIT(A) erred in confirming the disallowance of ₹ 2,44,644/- out of the generator maintenance expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A) did not appreciate the facts of the case and consequently erred in applying the provisions of sec. 40(A)(2)(b) with respect to interest paid to partner which was in accordance with law. 9.4] The learned CIT(A) failed to appreciate that the quantum of interest paid by the partner to the parties from whom he had received gold had nothing to do with the appellant's claim for deduction u/s. 40(b) of the Act. 10] Out of depreciation on windmill - ₹ 31,133/- 10.1] The learned CIT(A) erred in confirming the disallowance of the depreciation on part of the structure of wind mill by applying the rate of 10% as applicable to buildings and he failed to appreciate that this structure was part of the wind mill eligible for depreciation @ 80% 11] The appellant requests for admission of additional evidences if any required in deciding the above grounds of appeal. 12] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal. ITA No. 607/PN/2013 (Concise grounds of appeal by Revenue): 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in making the estimation of GP and not upholding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he details of which are as under: He, therefore, asked the assessee to furnish the various details as per notice issued u/s. 142(1) to which the assessee replied. 4.3 From the various details furnished by the assessee the Assessing Officer noted that the assessee firm sold gold ornaments to sisters concerns at lower price than sold to other parties by ₹ 40.36/gram. He noted from the various details furnished by the assessee that on the other dates either it has been sold below the cost price or slightly above the cost price and in this way the assessee firm has diverted its profit to sisters concerns by making sale at lower rates. He observed that no uniform method is applied by the assessee for sales to sister concerns and the rates are decided at its own sweet will. Keeping all these facts in mind, the Assessing Officer considered the average rate as made to the other parties than the sisters concerns and added the difference of ₹ 40.36/gram on entire sale of 29,77,287.493 grams made to sister concerns. Such details are annexed to the assessment order as Annexure-I. Thus, he made an addition of ₹ 12,01,63,323/- to the total income of the assessee on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 88.002 grams which comes to 25908.800 grams as against melting gain shown at 20288.186 grams. Accordingly, he held that gold weighing 5620.6014 grams has been suppressed and the assessee got manufactured new ornaments itself that are sold outside the books of account. The average rate/gram from the quantitative details of sales comes to 1510.50/gram. By applying the same rate, the Assessing Officer held that the assessee had earned income of ₹ 84,89,937/- on account of sale. He accordingly brought to tax an amount of ₹ 84,89,937/- as income on account of melting gain. 4.6 The Assessing Officer further noted that the various Karigars are doing the work for maximum number of cases of Rajmal Lakhichand group. None of the karigars were found to be having knowledge as to from which company they are receiving the gold for preparing the ornaments. None of the karigars is having knowledge as to how much labour charges he received from which company. They failed to give the details of the company-wise receipts. From the above, he observed that all these karigars are nothing but puppets of the assessee and they do not understand the intricacy of the law or account. By not main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of all the concerns which show sale of ₹ 2219.54 crores while the sales actually made to the third parties are only ₹ 679.66 crores. Further, he also compared the purchase price paid to the sister concerns for bullion, vis-a-vis market price as per Mumbai bullion Association and noted that the assessee has paid higher purchase price of ₹ 3,10,10,720/- to the sister concerns. Similarly, he compared the purchase of ornaments from the sister concerns, vis-avis third parties and noted that the assessee has made excess payment of ₹ 18 crore to the sister concerns, vis-a-vis third parties. He observed that the assessee charged an average price of ₹ 13,350/- per 10 gm for the ornaments sold to the sister concerns as against the average price of ₹ 13,906/- per 10 gm charged to third parties. Thus, the difference comes to ₹ 55.60 per gm. He noted that the register for issue and receipt of gold are not supported by karigars to whom the gold was given and therefore the register cannot be accepted. Similarly, he also rejected the contention of the assessee that the melting gain shown in the books was supported by quantitative records and hence shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of bullion from the sister concerns except in a few cases where it has purchased from outside parties. He submitted that like the stock market, during a day, the gold prices fluctuate and daily closing rates of Mumbai Bullion are published in the papers. The AO compared the rates paid by the assessee, vis-a-vis the Bombay rates and held that the assessee has paid the excess price to the sister concerns and accordingly invoked the provisions of section 40A(2) for making the addition. He submitted that since the assessee is making purchases at Jalgaon, therefore, there is no reason to compare the rates of Mumbai with the purchases rate of the assessee. The AO should have compared the rate of purchases vis-a-vis Jalgaon, i.e. the local rates. He submitted that although this contention was raised before the CIT(A), however, he also did not accept this contention. Referring to page 1 to 6 of paper book No. 2 he drew the attention of the Bench to the comparable rates of Mumbai market and Jalgaon market. Referring to the said, he submitted that the assessee by and large has paid the rates to the sister concerns for purchase of bullion which are lesser than the Jalgaon market rates. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3 Referring to the copy of the assessment order of the group concerns placed at paper book 254 to 364 of paper book No. 1, he submitted that in other concerns the AO has invoked the provisions of section 40A(2) to hold that it has paid excess price to the other concerns for purchases. Referring to the assessment order of M/s. Manvi Holding Pvt. Ltd., placed at paper book page 274 he submitted that this is contradictory to the stand taken in the assessee's case, because on one side in the hands of the assessee, the AO holds that the assessee has paid excess price to Manvi Holdings. He accordingly submitted that the disallowance u/s. 40A(2) is not justified in respect of the purchases of bullion from the sister concerns. 6.4 As regards the allegation of the AO that assessee has paid excessive price for purchase of ornaments to the sister concerns, he submitted that the purchases and sales with the sister concerns are entered into by the assessee mainly to obtain bank finance. If this was not done the group would not have got the bank finance and it would not have been able to achieve the growth. Therefore, these purchase of new ornaments made by the assessee are routed throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher rate. This only will bring profit to any jeweller. Therefore the purchase rates of old ornaments are much lower. So far as the new ornaments are concerned, they are made on the instruction of the assessee from bullion or gold given to the karigars. 6.7 He submitted that the A.O./CIT(A) has again compared the rates of the new ornaments by considering the Bombay Bullion rates. He reiterated that basically Bombay Bullion rates should not be adopted for comparison of purchases and the yardstick should be based on Jalgaon rates. If Jalgaon rates are considered, the assessee has infact paid lesser price and therefore question of disallowance u/s. 40A(2) is not warranted. 6.8 As regards the allegation of the Revenue that the assessee has transferred profits to the sister concerns by paying a higher price for purchases and charging a lower price for the sales effected to sister concerns he submitted that this finding is also wrong. Referring to page 52 of Paper Book 1, he drew the attention of the Bench to the chart giving the details of sales of bullion effected to sister concerns and submitted that these sales have fetched excess price of ₹ 1,13,57,471/- to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed exactly while purchasing the old ornaments where each item is different from the other. Whatever is obtained as melting gain, is accounted for by the assessee. He submitted that the assessee has maintained proper records. Therefore, the addition on this basis is also not justified. 6.12 The Ld. Counsel for the assessee submitted that the assessee has maintained the books of accounts which are closed and supported by balance sheet. All sales and purchases are vouched and the purchases are made through banking channels. Day to Day stock records are maintained and accounts are audited. There are no adverse comments by the auditors. In the past years also, the results shown by the assessee are by and large accepted. The A.O. had raised many points about rejecting the books of accounts and the same have been answered by the assessee properly. The points raised by the A.O. were replied point-wise before CIT(A). Therefore, it is grossly incorrect on the part of the CIT(A) to hold that the assessee's books of accounts suffer from certain defects. Accordingly, the rejection of books of accounts is not warranted and secondly, the estimation of G.P. at such a high figure is not just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The CIT(A) has estimated 25% of purchases and sales with the sister concerns as genuine and further, he has estimated the G.P. of 5.71%. Accordingly, he has calculated G.P. @ 5.71% on estimated turnover of ₹ 5,65,51,47,670/- and arrived at ₹ 32,29,08,931/- as against the G.P. of ₹ 10,79,15,449/- and made an addition of ₹ 21,49,93,482/-. He submitted that in view of the facts and circumstances mentioned above, there is no justification for rejecting the books of accounts and for estimating the G.P. 6.17 He submitted the reasons for fall in G.P. in this year are due to the following: a. The turnover has increased substantially over the earlier two years and hence, there is a fall in G.P. b. The gold prices went on increasing during the year. Referring to page 55A he submitted that the assessee has given the chart which indicates that on 1st April, 2008 the gold rate was ₹ 11,750/- per 10 gms while on 31st March, it was ₹ 15,250/- per 10 gms (page 55F). The assessee had taken gold deposits and it had to return gold to the depositors in this year (pages 386 to 501 of Paper Book 1). Thus, when the gold deposit was accepted, it was at a lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssues, i.e. (1) rejection of books of account as the AO resorted to the provisions of section 145(3) of the Act and (2) very high pitch additions made by the AO on the alleged purchases of the bullion and ornaments by giving higher prices as compared with the prices prevailing at the Mumbai bullion market and the addition towards alleged selling of bullion and ornaments to its sister concerns below the rate prevailing in the market thereby siphoning off the profits of the assessee firm to the intra group companies and more particularly to M/s. Rajmal Lakhichand Jewellers Pvt. Ltd. 8.1 We find the Ld. CIT(A) has taken efforts to bring on record the shareholding of the Lakhichand family who is having the absolute control on the management and business of the Rajmal Lakhichand group of companies. For the sake of convenience, we reproduce some of the tables giving the details of shareholding of Shri Ishwarlal S. Lalwani and his family members in the different companies which are as under: 6. I have carefully gone through the assessment order, remand report of the A.O. detailed submission of the appellant and the material available on record. Before adjudicating the various issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter immediately. The assessee has filed the details giving the cash credit facility from the Jalgaon Peoples Cooperative Society Ltd., against the hypothecation of the stock and debtors. On this aspect the AO concluded that the book results are not reliable. The AO has also given another reason that the assessee failed to file reconciliation of the stock statement in respect of the sales made on 31-03-2009. The AO has also reservation as the assessee could not prove conclusively the movement of the goods from one location to another, i.e. from one of the group companies to the assessee's location and vice versa. During the course of assessment proceedings, the AO asked the assessee to prove that the payment of the labour charges are genuine. The AO also noted that there is expenses towards purchase of the copper by the assessee and no separate making charges were mentioned on the sale bills and hence the book results were not reliable. The AO issued notices to some of the Karigars who are involved in refining of the old ornaments as well as making of the jewellery. As noted by the AO all of them responded but stated that no record for receipt of sold or prepared ornaments a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act for alleged business of gold and ornament from its group companies or sister concerns by giving them higher price as compared to the prices declared by the Mumbai Bullion Association. Similarly, the AO also made addition of ₹ 12,01,53,323/- for alleged sale to the sister concerns of the ornaments and the bullion at a price which are allegedly lesser as compared to the rates declared by the Mumbai Bullion Association. 8.6 Para 10 is the only paragraph in the assessment order where the AO has given his reasons and findings on account of the above two additions. For the sake of convenience we reproduce here the relevant paragraphs from the assessment order where the AO has made the addition: 10. Sales to sister concern- The assessee vide its letter dated Nil submitted the details of total sales for the period under consideration made to sister concern and other parties, which is enclosed with this office as Annexure-1. From the details furnished, it can be seen that the assessee firm sold gold ornaments to sister concern at lower price than sold to other parties by ₹ 40.36 per gram, Further, it can also be seen that on the other dates either it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber of occasions, melting gain have been more than 9% to 10%. Therefore, the melting gain is estimated at 10% of the issued gold weighing 259088.002 grams which comes at 25908.800 grams as against shown gain at 20288.186 grams. Accordingly, the gold weighing 5620.6014 grams has been suppressed and the assessee got manufactured the new ornaments out of that and sold outside the books of accounts. The average rate per gram as per the quantitative details on sale comes to ₹ 1510.50 per gram, By applying the same rate, the assessee had earned income of ₹ 84,89,937/- on account of sale. The entire sale consideration is taxed as income because the expenditure incurred towards its purchases, refining charges etc. have already been debited. In sum and substance in the opinion of the AO the average of the melting gain declared by the assessee at 7.3% was not acceptable as in some of the months the melting gain percentage was ranging from 10.31% to 14.54%. The AO, therefore, estimated the melting gain at 10% of the gold issued weighing 259088 grams and accordingly made addition of ₹ 84,89,937/-. 8.9 The assessee challenged all the above additions before the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 419.87 crore from sister concerns representing 99.30% of total bullion purchased. The assessee has purchased only 25kg bullion valuing ₹ 2.91 crore from other parties. Similarly, the assessee has purchased new ornaments worth ₹ 453.72 crore from the sister concerns representing 88.99% of the total ornament purchases. The assessee firm has purchased old ornaments (mod) worth ₹ 56.10 crore from third parties. As regards sale of bullion, the assessee firm has sold bullion worth ₹ 122.90 crore representing 27.7% of total sales of bullion to its sister concerns as against sale of bullion worth ₹ 320.76 crore to other parties. The assessee has sold ornaments worth ₹ 397.45 crore (78.18%) to its sister concerns as against ₹ 110.89 crore (21.81%) to other parties. He noted that apart from the assessee firm, only M/s. Rajmal Lakhichand Jeweller (P) Ltd. sells bullion and gold ornaments directly to the customers through its 3 showrooms located at Surat, Nashik and Thane. According to him it is rather surprising that the assessee firm is engaged in hundreds of transactions of purchase and sale of ornaments with the sister concerns which do not sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erage prices towards the purchase of the ornaments and bullion (para 10 of CIT(A)'s order): 8.16 As observed by the Ld. CIT(A) all the above concerns of the group, except M/s. Rajmal Lakhichand Jewellers Pvt. Ltd. has paid higher average price/gm of bullion to sister concerns, vis-a-vis purchases from the third parties. He has further observed that in respect of the ornaments while Rajmal Lakhichand and sons, Manvi Holdings Pvt. Ltd. R.L. Gold Pvt. Ltd., and Rajmal Lakhichand Jewellers Pvt. Ltd., did not purchase ornaments from third parties, R.L. Gold Pvt. Ltd. and Rajmal Lakhichand Jewellers Pvt. Ltd. are paid higher price/10gms to sister concerns, vis-a-vis purchase from third parties. It appears that the Ld. CIT(A) after obtaining a lot of data from the assessee in respect of the intra group transactions of the sales and purchases noted that in respect of the purchases made from intra group companies the price paid was 5.83% higher in the case of Rajmal Lakhichand Jewellers Pvt. Ltd. and 14% in the case of R.L. Gold (P) Ltd. As observed by the Ld. CIT(A) Manvi Holdings Pvt. Ltd. has sold gold ornaments to third parties at ₹ 15232/10 gms as against ₹ 13,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and gold(kg) from 3rd parties : 4624.36 kg Add: a) Opening stock : 365.89 kg b) Gold under GDS : 5.00 kg ii) Total availability of Bullion and ornaments : 4995.26 kg iii) Closing stock : 436.00 kg iv) Bullion and ornaments available for sale (ii)-(iii) : 4559.23 kg v) Total sale of bullion and jewellery shown by the group : 16415.77 kg After recording the above facts and figures the Ld. CIT(A) concluded that the entire group has shown inflated turnover in the form of fictitious purchases and fictitious sales in the name of the sister concerns. He also observed that the bullion and ornaments to the extent of 4559.23 kgs are rotated more than 3.6 times by showing sales to the sister concerns which according to the Ld. CIT(A) are only paper transactions. According to the Ld. CIT(A) there are few trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r concerns as against the average price of ₹ 13,906/10 gms charged from other parties for sale of gold ornaments. As noted by the Ld. CIT(A) the difference in the average sale price worked out to ₹ 55.60/gm as against ₹ 40.96/gm taken by the AO in the assessment order. The Ld. CIT(A) has also observed that although there is no provision in the Income Tax unlike section 40A(2)(b) which is in respect of the expenditure but the said aspect also cannot be ignored which has affected the gross profit and suggest that books of account do not depict the correct picture. 8.19 in respect of the melting gain addition of ₹ 84,89,937/-, the Ld. CIT(A) has observed that the assessee has purchased gold ornaments weighing 436.56 kg mainly comprising of MOD (old ornaments) from the third parties and assessee has shown the melting gain in respect of 259.08 kg only. The rest was used as bullion or new ornaments. The assessee filed the chart showing the gross weight of the ornaments, net weight of the ornaments and net weight after refining of the ornaments and according to the assessee the average melting gain comes to 7.83%. The AO has already rejected the said plea of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover comprise major part of the transactions with the intra group companies. As per the explanation of the assessee, the transactions in the other companies were inflated to get the bank finance as the assessee was having limited CC limit. It is also seen that assessee has sold ornaments to M/s. Manraj Jewellers Pvt. Ltd. on 30-03-2009 to the extent of ₹ 24.41 crores and purchased ornaments to the extent of ₹ 20.47 crores on 31-03-2009 The said Manraj Jewellers Pvt. Ltd. has no showroom but has shown the purchase of 959.66kg of ornament at market value of ₹ 127.42 crores from the sister concerns. The Ld. CIT(A) has also brought most of the data, facts and figures to show as to how the assessee as well as other group companies in the Lakhichand Jewellers group are involved in inflating the turnover by showing only paper transactions of sale and purchases of bullion as well as ornaments. Even it is also strange to note that in the case of Manraj Jewellers Pvt. Ltd. and other few entities they do not have any showroom, but they have shown/declared such transactions. In view of the above, the books of account of the assessee, in our opinion, do not give the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover of ₹ 565.51 crores and worked out the GP at ₹ 32,29,08,931/- which according to the CIT(A) is the reasonable and fair GP and he reduced the GP declared by the assessee from the said figure of ₹ 10,79,15,449/-. He finally sustained addition of ₹ 21,49,93,482/- as against total addition of ₹ 77,50,76,249/- made by the Assessing Officer, i.e. on account of purchases from the sister concerns ₹ 64,64,22,989/-, diversion of profit to sister concerns ₹ 12,01,63,323/- and melting gain of ₹ 84,89,937/-. 8.24 in the present case, the entire GP addition is based on the local market rate of the bullion in Jalgaon and Mumbai market rate which are given by the Mumbai Bullion Association. In the present case, the commodity is gold and both the authorities below have worked out the average price of the bullion as well as the ornaments/gm for making the comparison of the market rate in Jalgaon and market rate in Mumbai. There is no dispute about the fact that there are lot of intra group transactions in respect of the bullion as well as the ornaments. As per the record, it is seen that the assessee is dealing in the 99.50 (standard gold-bull ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable. There is no dispute about this legal position but the core question is whether the assessee has paid excess price than the market rate to the related parties or to the sister concerns for the purchase of the bullion (99.50-standard gold). As per the argument of the Ld. Counsel for the assessee, even if there is a marginal difference in the market price of the Mumbai and the Jalgaon but that prices are covered in the transportation and delivery. The assessee has filed a chart at pages 42 to 55 of paper book No. 1 in which assessee has given names of the sister concerns, gold weight, rate paid, total value, sales, Jalgaon rate on the same day and the Mumbai rate. As per the said chart on 09-04-2008 for the standard gold- (99.50), the assessee has paid ₹ 12400/10 gms when the Jalgaon rate was ₹ 11805/10 gms. Hence, there is a difference of ₹ 595/-. So assessee has made excess payment. The assessee has also given examples on 03-05-2008 and 06-05-2008, as per the chart compared to the even local market the assessee has made the payment in excess of the local market rates. Immediately thereafter assessee has given the sample examples on 08-05-2008, 26-05-2008 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the assessee is that it was done to facilitate to obtain the finance. It is pertinent to note here that assessee has filed the chart showing the loans availed by the assessee and other group concerns, which is placed at pages 711 to 714 of the paper book. The assessee was enjoying the CC limit of ₹ 5.56 crores. At the same time, the other group concerns/sister concerns were enjoying the CC limit of ₹ 52.81 crores. The assessee has also filed a letter dated 25-04-2008 of the SBI (page 712 of paper book) in which one of the group concerns M/s. R.L. Gold Pvt. Ltd. has obtained a gold loan under the domestic jewellery industry scheme from the SBI to the extent of 30 kg. It also supports the case of the assessee that with the meager cash credit limit of ₹ 5 crore the assessee by no stretch of imagination can reach to the turnover of ₹ 955 crore. As per the statistics given by the Ld. CIT(A) in his order, it is seen that there is high frequency of transactions between the assessee and intra group entities. Even in some of the cases bullion is purchased and sold either on the same date or immediately on the next day. If the assessee has not earned any inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount prepared by the Ld. CIT(A) as the total turnover of the assessee is shown at ₹ 1065.32 crores when the same is actually 955.78 crores. Same way, the transactions with the third parties including bullion and gold are to the extent of ₹ 435.37 crores but as per the trading account prepared by the Ld. CIT(A) the same is shown as ₹ 679.66 crores. Hence, prima-facie there are mistakes in the recasted trading account and the same cannot be put to test. 8.31 The next area of the transactions is gold ornaments. Admittedly, the assessee is also manufacturing and selling gold ornaments. The assessee is also engaged in buying gold ornaments and after refining the same, said gold is used in the manufacturing of the jewellery. There are intra entity transactions of the ornaments by the assessee as well as transactions with the third party. As per the chart attached to the assessment order, the total sale of the ornaments to sister concerns is to the extent of ₹ 397.45 crores and to the third parties ₹ 110.89 crores. As per the statistics given in the impugned order, it is seen that the assessee has sold the ornaments to the sister concerns and immediately o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned above which changes the price of the ornaments. Moreover, there may be variation in the labour charges also. Hence, we do not agree with the average price formula adopted by both the authorities below for making the addition of ₹ 12,01,63,323/- on alleged selling of the ornaments to the sister concerns at lower price than the price charged to the unrelated parties. 8.33 We also find that the trading account prepared by the Ld. CIT(A) (page 58 of his order which has already been reproduced at para 5 of the impugned order) also includes direct income (MTF gain). As per the chart placed before us, we find that the assessee firm is not involved in the marginal trading and forwarding contracts. But at the same time other intra group entities, i.e. R.L. Gold Pvt. Ltd. Rajmal Lakhichand Jewellers Pvt. Ltd., Manraj Jewellers Pvt. Ltd., R.L. Gold Pvt. Ltd. have declared substantial amount of MTF gain and the same is included in the gross profit of the respective concerns. We fail to understand when the assessee firm is not involved nor has earned any MTF gain, then how the Ld. CIT(A) has included the MTF gain of ₹ 25,50,87,766/. The assessee has filed the copy of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... melting gain. Though the Ld. CIT(A) confirmed the addition but he did not make any separate addition on the reason that the addition sustained towards purchase of the bullion at higher price and diversion of the profit will cover the estimated melting gain. The AO has observed that the assessee has shown melting gain of 7.83% which was not acceptable to the AO. He adopted 10% on estimate basis as melting gain and addition was made in respect of the difference to the income of the assessee. As noted by the AO on the gross gold (MOD) old ornaments weighing 259088 gms assessee had shown gain at 20288.186 gms which is average 7.83%. The AO worked out the gain at 25908 gms which is at 10% of the gross weight of the old ornaments given to the refinery and accordingly made addition by holding that the assessee has suppressed the melting gain to the extent of 5620.60 gms. The AO adopted the average price/gm at ₹ 1510.50 and accordingly made addition of ₹ 84,89,937/-. The Ld. CIT(A) confirmed the addition. 8.37 The contention of the assessee is that records are maintained by the assessee firm in respect of the ornaments given for refining. However, if the karigars have not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enance expenses of ₹ 12,44,644/-. 9.1 Facts of the case, in brief, are that the assessee had incurred an expenditure of ₹ 16,30,963/- on the running and maintenance of Generator as against ₹ 5,11,074/- and ₹ 5,99,972/- respectively incurred in the preceding 2 years. Out of the above amount, the Assessing Officer treated ₹ 1 lakh towards residential portion and rest ₹ 15,30,963/- towards business purposes for self and for sister concerns. Since the assessee has not recovered any amount from the sister concerns, the Assessing Officer disallowed 50% of the same presuming that it should have been recovered by the assessee from sister concerns. Thus, the Assessing Officer made addition of ₹ 1 lakh plus ₹ 7,65,481/-, i.e. ₹ 8,65,481/-. 9.2 In appeal the Ld. CIT(A) reduced the above disallowance from 50% to 15% of the total expenditure incurred on Generator expenses by observing as under: 33. The AO had disallowed ₹ 8,65,481/- vide para 19 of his order. However, it was not added back while computing the total income. Later, the error was rectified vide an order Dt. 23/01/2012 u/s. 154 of the Act. Facts of the case revea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee that rent also included providing generator services does not sound convincing. In any case, the Ld. CIT(A) has already restricted the disallowance to 15% of the total expenses of ₹ 16,30,963/-, which in our opinion, is reasonable under the facts and circumstances of the case and does not call for any interference. Accordingly, the above grounds by the assessee are dismissed. 10. Grounds of appeal No. 1(f) and 6 to 6.2 by the assessee relate to disallowance of interest on loan to R.K. Oswal Graphics Pvt. Ltd., amounting to ₹ 3 lakhs. 10.1 Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings noted that the assessee has advanced a sum of ₹ 25 lakhs to R.K. Oswal Graphics Pvt. Ltd., on 29-09-2008 and no interest has been charged. On being questioned by the Assessing Officer, it was submitted that the assessee had advanced a sum of ₹ 25 lakhs to R.K. Oswal Graphics Pvt. Ltd., for the purpose of printing calendars, however, the transaction did not materialise and the balance remained outstanding. Considering the trading nature of the advance given, the assessee has not charged any interest to the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, then notional interest on such advance in our opinion cannot be added. Since the party did not fulfil the contractual obligations the assessee has charged interest in subsequent years. However, for the impugned year, we find no justification on the part of the revenue to force the assessee to charge interest on such trade advance. In this view of the matter, we set-aside the order of the Ld. CIT(A) and direct the Assessing Officer to delete the addition. 11. Grounds of appeal No. 1(g) and 7 to 7.2 by the assessee relates to disallowance of interest amounting to ₹ 7,51,171/-. 11.1 Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings noted that the assessee has invested the business funds towards construction of guest house. The opening balance was ₹ 93,07,328/- and the closing balance was ₹ 1,57,31,726/-. On being questioned by the Assessing Officer, it was submitted that the expenditure was incurred for constructing the guest house and not for expansion of existing business or starting any new business and therefore were not capitalised. Therefore, the provisions of section 36(1)(iii) will not apply. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give any direction on this issue. The assessee may raise this plea at appropriate time at appropriate level. This ground by the assessee is accordingly dismissed. 12. Grounds of appeal No. 1(i) and 9 to 9.4 by the assessee relate to disallowance of interest to partners amounting to ₹ 18,92,421/-. 12.1 Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed that the assessee firm has paid interest on GDS to partner Shri Ishwarlal I. Lalwani at ₹ 45,31,460/- whereas Ishwarlal has paid interest to gold depositors at ₹ 26,39,039/-. He observed that the partner does not deal with gold ornaments business in his individual capacity. It is the firm which deals with gold ornaments business. The firm and Ishwarlal Lalwani obtained the gold from the public on same terms and conditions and pay interest on same rate but certain gold is accepted in the partner's account by the staff of the firm and then the partner gives it to the firm on higher rate and in this way the firm pays more interest to the partner. According to the Assessing Officer, if the same gold was directly routed through the firm, the firm wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st payment of interest to the depositors at the value of ₹ 2,750 per 10gms is nothing but a colourable device to evade tax. The firm is accepting gold from partner but GDS. Hence, the firm cannot resort to two different practices, i.e. paying interest @9% on the prevailing value of gold to the partner and paying interest @9-16.5% on quarterly basis on a fixed value of ₹ 2,750 per 10gm to other depositors. Looking the matter from this angle, in my opinion, the AO is justified in disallowing the excess interest of ₹ 18,92,421/- applying the provisions of Sec. 40A(2)(b) of the Act. The disallowance of ₹ 18,92,421/- out of interest paid to the partner is accordingly, confirmed . 12.3 Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 12.4 The Ld. Counsel for the assessee strongly opposed the order of the CIT(A). He submitted that as far as the firm and partner are concerned, the interest on the capital contributed by the partner is governed by section 40(b) of the Act which provides that simple interest upto 12% per annum on the capital contributed by the partner will be allowed as deduction while computing the income of the firm. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to the Ld. Counsel for the assessee, the assessee firm could receive additional gold deposit than what it could have received under its own gold deposit scheme on account of gold deposit scheme started by one of its partner. It is also the submission of the Ld. Counsel for the assessee that the firm would have paid higher amount of bank interest by getting that much quantity of gold than it paid to the partner on account of such quantity of gold. 12.7 We find merit in the above submission of the Ld. Counsel for the assessee. There is no bar for the partner to obtain the gold under the gold deposit scheme which was simultaneously done by the assessee firm also. As long as the interest paid to the partner on such gold under the gold deposit scheme is within the permissible limit, there should not be any disallowance. Since in the instant case the firm has paid interest @9% on the gold deposited by the partner obtained from the customers under the gold deposit scheme account, therefore, it is immaterial as to at what rate of interest the partner has paid to the customers. In this view of the matter, we set-aside the order of the CIT(A) on this issue and direct the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessee's own case for A.Y. 2008-09 has directed the Assessing Officer to calculate depreciation on preparation of approach roads to 10% and allow depreciation on electrical yard fencing at 80%. We, therefore, restore the issue to the file of the Assessing Officer with a direction to recompute the depreciation on windmill in the light of the direction of the Tribunal for A.Y. 2008-09. We hold and direct accordingly. This ground by the assessee is accordingly allowed for statistical purposes. 14. Grounds of appeal No. 1(b) and 1(c) and 3 to 3.4 by the Assessee and grounds of appeal No. 1 by the Revenue relate to the disallowance u/s. 14A and 36(1)(iii) of the I.T. Act. 14.1 Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed that the assessee has invested ₹ 42.75 crores towards share application money in Rajmal Lakhichand Jewellers Pvt. Ltd., out of which opening balance was ₹ 28 crores and during the year further amount of ₹ 14.77 crores was invested. He observed that the assessee is not only utilising the business funds of the firm but also utilising the services of the employees, electrici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot its business. The assessee has to make out a case of business expediency. A perusal of the balance sheet reveals partner's capital account at ₹ 21,14,935/- only on which also the firm is paying interest. While secured loans account for ₹ 16.66 crore, unsecured loans account for ₹ 6.36 crore only. Sundry creditors amounting to ₹ 196.95 crore include M/s. Manraj Jewellers (P) Ltd. (Rs. 60.83 crore); Manvi Holdings (P) Ltd. (Rs. 4.94 crore); R L Gold (P) Ltd. (Rs. 50.26); R L Sons (Rs. 17.70 crore) and RLJPL (Rs. 61.96 crore). This according to Ld. CIT(A) shows clearly that the firm has used borrowed funds for making investment in the group companies. The firm has also accepted the fact that borrowed funds have been used for investment in shares of its closely held group companies. The firm is paying interest on the above mentioned funds including sundry creditors. The appellant according to Ld. CIT(A) has also made loans and advances to the tune of ₹ 97.53 crore. The appellant has paid total interest amounting to ₹ 12.52 crore and received an interest of ₹ 6.44 crore. The appellant has failed to prove that the said investment was mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of interest of ₹ 4,82,82,028/- has been made u/s. 36(1)(iii) of the Act as it is beneficial to the revenue. Ld. CIT(A) accordingly made addition of ₹ 29,09,882/- and no separate addition u/s. 14A was made. 14.4 Aggrieved with such order of the CIT(A) the assessee as well as the Revenue are in appeal before us. 14.5 The assessee has also taken the following additional ground: 1] Assuming without admitting that the interest of ₹ 4,82,82,028/- is disallowable u/s. 36(1)(iii) as the borrowings are utilised for investment in shares of the group companies, the learned CIT(A) failed to appreciate that-- a. The above interest is allowable as a deduction under the head 'income from other sources' and even though, there is no dividend received from these companies, the interest is allowable in view of Supreme Court decision in [115 ITR 519]. b. The allowance of this interest would result in the loss under the head 'income from other sources' and the same ought to have been set off against income from business u/s. 71. c. Accordingly, there is no addition required of the above amount to the total income of the assessee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn they could supply bullion and ornaments to the assessee. Therefore, the assessee could increase its turnover substantially. He submitted that the intention behind making investment in the group companies was obtaining the bank finance. The results of the transaction with the group companies are very clear in that the turnover of the assessee has increased substantially over the period of last 3 years. Therefore, this investment is made for business purposes only, therefore, disallowance is not justified. 14.10 in his alternate contention, he submitted that since the assessee had substantial non-interest bearing funds in the form of capital and the sundry creditors which exceeds the amounts of investment in the sister concerns, therefore, following the decision of the Hon'ble Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd., reported in 313 ITR 340 no disallowance of interest is called for. In his yet another alternate contention the Ld. Counsel for the assessee submitted that the interest income is to be allowed as deduction under the head income from other sources as the share investment in the group concerns would yield dividend income which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.13 The Ld. Counsel for the assessee in his rejoinder submitted that provisions of section 115(O) are applicable to a Private Limited Company. 14.14 We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed by the assessee. We have also considered the various decisions relied on by both the sides. The assessee in the additional grounds has claimed that the interest income is to be allowed as a deduction under the head income from other sources as the share investments in the group concerns would yield dividend income which is taxable under this head. According to the Ld. Counsel for the assessee although no dividend income has been received during the year, however, such interest is allowable as a deduction and therefore there will be loss to the extent of ₹ 4,82,82,028/- which can be set off against business income during the year u/s. 71 of the I.T. Act. However, this alternate contention as per the additional grounds of appeal was not examined by the lower authorities since the assessee has raised this issue for the first time before the Tribunal as additional grounds and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses, the Assessing Officer disallowed an amount of ₹ 6,50,613/- being used by the sister concern from whom no charges on this account has been recovered. The Assessing Officer similarly noted that the market rate/sq. ft. of the property will be ₹ 20/- per sq.ft. and the rental income should have been ₹ 9,28,244/-. However, the assessee has charged only ₹ 4,72,800/-. Therefore, the difference is ₹ 4,56,244/-. Similarly, in absence of any rent received from partners he determined the rental income of the residential portion at ₹ 6,96,183/-. Thus, the gross total income was determined by the Assessing Officer at ₹ 16,24,427/-. After deducting the municipal tax and 30% deduction u/s. 24, he determined the income from house property at ₹ 10,46,392/-. After deducting the rental income disclosed by the assessee at ₹ 2,40,254/- the Assessing Officer made addition of ₹ 8,06,138/-. Thus, he made a total addition of ₹ 15,76,669/- (Rs. 1,19,918 + 6,50,613 + 8,06,139). Original addition was ₹ 22,62,889/- which was subsequently rectified to ₹ 15,76,669/-. 15.2 In appeal the Ld. CIT(A) deleted some of the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... @ 15% of the balance amount i.e. 1,95,184/- (15% of ₹ 13,01,227/-) would meet the end of the justice. Disallowance @15% also seems to be rational in view of the fact that rent is also being recovered from tenant sister concerns. The appellant gets a relief of ₹ 4,55,429/-. 31.3 As regards the remaining addition of ₹ 8,06,138/- on account of alleged short rent receipt, it seems to be resulting from a guess work. There are many other personal and business consideration for not letting out the premises to an outsider especially when partners themselves are residing in the building. The AO has not brought on record any material in support of this addition. I am therefore of the opinion that there is no justification for the said addition which is hereby deleted. In short out of the aggregate addition of ₹ 15,76,669/-, the disallowances of ₹ 3,15,102 (Rs. 81,906 + ₹ 38,012+ ₹ 1,95,184) are confirmed, while the addition of ₹ 12.61.567/- (Rs. 4,56,429 + ₹ 8,06,138) is deleted. 15.3 Aggrieved with such order of the CIT(A) the Assessee as well as the Revenue are in appeal before us. 15.4 The Ld. Counsel for the assessee strongl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and business for getting higher rent which again is based on presumptions and surmises. The Assessing Officer has not brought on record any evidence to show that is the market rent of the premises of similar type located in same area. Therefore, we find no infirmity in the order of the CIT(A) on this issue. Accordingly, the same is upheld. Grounds raised by the assessee as well as the revenue are accordingly dismissed. 16. Revised ground of appeal No. 4 by the Revenue and Ground of appeal No. 1(h) and 8.1 by the assessee relate to part relief given by the Ld. CIT(A) out of addition on account of difference in trade creditors. 16.1 Facts of the case, in brief, are that the assessee during the course of assessment proceedings noted that there is difference in the closing balance of two creditors namely, Sunny foresight Pvt. Ltd., Mumbai ₹ 42,847/- and Harmony Multi Media Pvt. Ltd., Surat ₹ 67,690/-. On being questioned by the AO, the assessee submitted that the balance due by the assessee to Sunny foresight Pvt. Ltd., as on 31-03-2009 was ₹ 1,12,273/- whereas the dues shown by the assessee was ₹ 1,55,120/-. It was submitted that during F.Y. 2009-10 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law, the Ld. CIT(A) erred in addition made on account of Driver's Salary of ₹ 32,086/-. 17.1 Facts of the case, in brief, are that the Assessing Officer in the assessment disallowed 1/3rd salary of the drivers amounting to ₹ 32,086/- out of the salary and bonus paid to one Sri Ramdas Kardille amounting to ₹ 96,258/- being attributable to personal use. In appeal the Ld. CIT(A) deleted the addition holding that the drivers salary is not an item covered by any of the provisions of section 38(2). Further, salary to driver being fixed such expenditure remains same whether the vehicle is used for personal purpose or not. The provisions of section 38(2) relied upon by the Assessing Officer according to the Ld. CIT(A) also supports the contention of the assessee. He accordingly deleted the disallowance of ₹ 32,086/- out of driver's salary on the ground that the same is not in accordance with law. The Ld. Departmental Representative could not point out any mistake in the above finding of the Ld. CIT(A). In view of the above, we find no infirmity in the order of the Ld. CIT(A). Accordingly, same is upheld and the ground rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, deleted; while the closing WDV would be ₹ 1,46,67,933/- and not ₹ 1,38,53,048/- as worked out by the AO. 18.4 Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 18.5 After hearing both the sides, we find no infirmity in the order of the CIT(A) who decided the issue on the basis of the provisions of section 43(6) as well as the decisions cited before him. In absence of any contrary material brought to our notice by the Ld. Departmental Representative, we find no infirmity in the order of the CIT(A) on this issue. Accordingly, the same is upheld and the ground raised by the Revenue is dismissed. 19. Ground of appeal No. 7 by the Revenue reads as under: 7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of ₹ 1,44,856/- on account of disallowance of interest under GDS. 19.1 Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed that a sum of ₹ 1,44,856/- being post dated cheques issued by the assessee to the depositors under GDS are outstanding since 1998 to 30-03-2008. On being questioned by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Delhi High Court in CIT V. Jaipur Jewellers (187, Taxman, 169) the fact that the liability was old would not make any ground for addition. So long as there was no cessation of liability by writing back the same, no addition could be made under section 41(1). To the same effect is the decision of Hon'ble ITAT Mumbai in Thomas Cook (I) Ltd., V. Dy. CIT (105, TTJ, 317) wherein the issue was decided in assessee's favour though the liabilities were unilaterally written back. In this case the appellant has not written back any such liability. Therefore explanation 1 to Sec. 41(1) is also not applicable to the facts in question. Considering the facts of the case and the judicial decisions, I am of the opinion that the addition of ₹ 1,44,856/- u/s. 41(1) has no merit and the same is deleted. 19.5 Aggrieved with such order of the Ld. CIT(A) the Revenue is in appeal before us. 19.6 After hearing both the sides, we find no infirmity in the order of the CIT(A) deleting the addition. Admittedly, the assessee has not written off the liability entries in its books of account and the same continues to appear in the balance sheet. Merely because the liability was old, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter 31-03-2009 and the copies of receipts of such parties were also produced during the course of assessment proceedings. Since the photographs/identity proof of the depositors are not in dispute in 281 letters out of 331 letters sent by the Assessing Officer, therefore, the genuineness of the depositors is proved. The Ld. CIT(A) called for a remand report from the Assessing Officer on this issue. In the remand report submitted by the Assessing Officer he was silent on this issue. 20.3 Based on the arguments advanced by the assessee Ld. CIT(A) deleted the addition by observing as under: 46. The GDS introduced by the appellant firm is in operation since 1993. It has been brought to my notice that so far there is no complaint from any of the depositors regarding the non receipt of gold either on maturity or at anytime thereafter irrespective of the time that might have passed after the date of maturity. The appellant has also placed on record copies of relevant receipts etc. in respect of all depositors including 50 depositors to whom letters are stated to have not been served. Again as per the regular practice the appellant issues post dated cheques to the depositors against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turned unserved. The Gold Deposit Scheme floated by the assessee is in operation since last 18 to 19 years and in the past assessments completed u/s. 143(3) no such addition has been made on this account. Further, the finding given by the Ld. CIT(A) that no addition could be made in the year under appeal when deposits had been received in earlier years could not be controverted by the Ld. Departmental Representative. In this view of the matter and in view of the detailed reasoning given by the Ld. CIT(A) while deleting the addition, we find no infirmity in the same. Accordingly, same is upheld and the ground raised by the revenue is dismissed. 21. Grounds of appeal No. 9 by the revenue relates to the order of the CIT(A) in deleting addition of ₹ 1,32,772/- on account of bogus liability. 21.1 Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings sent notice u/s. 133(6) to various parties. However, no reply was received from Mr. Ghulabchand M. Rajur of Ahmedabad. The assessee furnished the copy of the ledger for F.Y. 2009-10 according to which the payment has been shown in cash on different dates below ₹ 20,000/- eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of the said party and has shown to have made the payment of ₹ 1,20,000/- subsequently which was before the completion of the assessment for the impugned assessment year, therefore, we do not find any infirmity in the order of the CIT(A) deleting the addition. Nothing contrary was brought to our notice by the Ld. Departmental Representative against the reasoned findings given by the CIT(A). Accordingly, the same is upheld. Ground raised by the Revenue is accordingly dismissed. ITA No. 663/PN/2013 (u/s. 154) (A.Y. 2009-10): 22. Facts of the case, in brief, are that after the Ld. CIT(A) passed the order the assessee moved a rectification petition u/s. 154 before him stating that there are certain errors while working out the GP ratio which should have been 4.67% as against 5.71% determined by him. Similarly, the assessee also submitted that the sales to third parties was ₹ 6,69,79,16,774/- and not ₹ 679,66,42,775/- as considered by the Ld. CIT(A). However, the Ld. CIT(A) held that there is no mistake apparent from record as far as GP rate of 5.71% has been considered by him. It was estimated by him after rejecting the assessee's books of account u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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