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TMI Blog2020 (6) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... l on record. 3. Ground No.1 of the Revenue is as under : 1. "CIT(A) has erred in law in deleting the addition amounting to Rs. 4,44,11,358/- made by AO on account of difference in total sales made during the year and total cash deposits u/s 68 as the assessee has failed to explain the source of cash deposits in the bank account amounting to Rs. 4,45,53,931/-.The plea taken by the appellant that purchases in the individual capacity were also routed through the HUF and accepted by CIT(A) is not substantiated." 4. The Ld. CIT(A) noted that the A.O. has made the above addition on account of alleged difference in the total sales made during the year and total cash deposits in the bank. The A.O. has added the entire amount of Rs. 4,45,53,931/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the admitted net profit rate of 0.32% should have been applied. Therefore, applying such net profit rate against the sales, the addition is restricted to Rs. 1,42,573/-. 5. The Ld. D.R. relied upon the Order of the A.O. and submitted that there was a difference in the bank deposits because A.O. found excess deposits of the impugned amount. The assessee failed to explain the same, therefore, addition has been correctly made. 6. On the other hand, Learned Counsel for the Assessee referred to page-14 of the PB to show that in the case of HUF assessee, the total sales were of Rs. 15,80,94,025/- and purchases were of Rs. 15,80,66,019/- as per the Trading A/c ending on 31.03.2013. He has referred to PB-2 which is computation of income. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hands of the assessee. The A.O. in para-2 of the assessment order has also mentioned the same details of the purchases as per the Trading A/c of the assessee and again compared with the bank statement and ultimately on the difference with regard to purchases, applied the G.P. rate of 0.80% for making the addition of Rs. 3,54,400/-. Thus, the crux of the matter had been that the A.O. accepted the sales and purchases disclosed by the assessee in the Trading A/c. The A.O. has also accepted profit declared by the assessee. The A.O. with regard to the unexplained purchases applied the G.P. rate for the purpose of making the addition, but, with regard to sales without comparing with the bank statement made the addition of the entire amount in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in deleting addition of Rs. 3,54,000/- made on account of applying G.P. Rate on the alleged difference of Rs. 4,43,00,084/- in the purchases as the assessee has failed to explain the source of cash deposits in his bank account amounting to Rs. 4,45,53,93/- during the assessment proceedings and no such proof was filed." 9. The Ld. CIT(A) similarly noted that A.O. has made the addition of Rs. 3,54,400/- by applying the GP rate. The alleged difference of Rs. 4,43,00,084/- was on account of purchases made on behalf of M/s Dwarka Enterprises, a proprietary concern of the appellant being run in individual capacity. Thus, there was no purchases outside the books of accounts. Therefore, the Ld. CIT(A) deleted the addition. No purchases are made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it is an adhoc addition in nature which cannot be made against the assessee. The Ld. CIT(A) relied upon Judgment of Hon'ble Delhi High Court in the case of National Industrial Corporation Ltd., 258 ITR 575 in which it was held that no adhoc disallowance could be made. The Ld. CIT(A) accordingly deleted the addition. 15. After considering the rival submissions, we are of the view that no interference is called for in the matter. The A.O. has not pointed out as to which of the vouchers of the expenditure have not been produced by the assessee. No details of the amount has also been mentioned. Therefore, disallowing 1/5th of the expenditure claimed of the assessee would amounts to adhoc addition which cannot be sustained in law. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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