9911796707
TMI Blog2017 (7) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and sustaining of Rs. 1,31,036/- u/s 40(a)(ia) on account of non-deduction of TDS payment made to Export Promotion council for Handicraft working under Ministry of Commerce and Industry under Government of India for Export Trade Fair organized by Government of India not liable for TDS u/s 196. Ground No. 3: The Ld. A.O. and CIT(A)-III, Jaipur has erred in law as well as in fact in arbitrarily adding up and sustaining the unexplained cash deposit u/s 69A of Rs. 37,34,500 in bank by the assessee whereas the assessee has duly disclosed such amount in his personal Balance Sheet not in business Balance Sheet. Even personal Cash Book with supporting evidence was provided before them. Ld. CIT(A-III) wrongly considered it as additional evidence under Rule 46A whereas these details were available at the time of assessment and duly submitted to Ld. CIT(A-III)." 487/JP/16 (Ground of Revenue's appeal): "1. On the facts and in the circumstances of the case, the CIT(A) has erred in allowing the relief of Rs. 34,55,489/- without considering the finding of the AO in the assessment order. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in reducing GP rate fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t according to accounting standard (AS-11) but the auditor has not taken pains to determine or calculate its' effect on profit of the assessee. Infect, if your honors sees profit and loss account, it is clear that assessee has shown an income of Rs. 9,95,761.95 on account of increase in the rate of foreign exchange. Increase in foreign currency is duly accounted for and is credited to profit and loss account. I am enclosing herewith a copy of margin in currency account which clarifies this matter. Accounting of certain Income and expenses on yearly basis:- In this observation/objection also, the auditor has not tried as to which are the expense and income accounted for on yearly basis and how this had effected the profits of the assessee. The effect of this system has not been calculated. The assessee is producing books of accounts before your honour for this verification also." 4. The Assessing Officer didn't find the submission of the assessee acceptable. The relevant findings of the AO are contained in para 3.3 and 3.4 of his order which are reproduced are as under:- "3.3 Non-maintenance of records of quantitative details renders the accounts of assessee incomplete. Prepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Further the Assessing Officer observed that the books of accounts of the assessee were rejected in A.Y. 2008-09 on similar grounds which has since been affirmed by the Tribunal. Following the same, he rejected the books of account u/s 145(3) of the Act. Being aggrieved the assessee carried the matter in appeal before the ld. AO who has confirmed the rejection of books of accounts. 6. Further Assessing Officer after rejection of books of accounts has estimated G.P. @17.20% as against G.P. @13.19% declared by the assessee and made an addition of Rs. 62,93,817/- to the declared income of the assessee. While doing so, the Assessing Officer followed the decision of the Tribunal in assessee's own case in A.Y. 2008-09 wherein the Tribunal confirmed the G.P. rate of 17.20% as against 14.11% declared by the assessee. The ld. CIT(A) noted that the past history of the assessee shows that G.P. rate declared by the assessee during the year is better than last 5 years except in A.Y. 2008-09 where the Tribunal upheld that the G.P. rate of 17.20% and thereafter considering the submission of the assessee in terms of increased of cost of raw material viz-a-viz in a sale price of the finished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) whereby the GP rate has been reduced to 15%. 9. We have heard the rival contentions and perused the material available on record. In view of the specific observations of the auditors in terms of inconsistency in maintaining the books of account and not following the well accepted accounting principles and the Coordinate Bench decision in assessee's own case for A.Y. 2008-09 wherein on similar basis the books of accounts were rejected, we see no reason to interfere with the order of the lower authority in terms of rejection of the books of accounts. 10. Regarding estimation of G.P. rate, wherein the books of accounts are rejected, a fair estimate is required to be made by the Assessing Officer. The principle of average taking into consideration last 5 years past history is clearly a robust and fair basis of estimation to determine the gross profits for the year under consideration. The ld. AR has submitted that average G.P rate of last 5 years comes to 12.29% as against declared G.P. rate of 13.19% in the year under consideration. On perusal of records, the track record of declared Gross profit by the assessee and gross profit as upheld either by AO or by higher appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of payment. No evidence is available on record to determine the exact nature of payment - whether its towards membership fees or towards participation in trade fair and stall booking or both. Accordingly, we are setting aside the matter to the file of the AO to examine the exact nature of payment and decide the matter a fresh as per law. Hence, the ground no. 2 of the assessee's appeal is allowed for statistical purposes. 13. Now coming to ground No. 3 of the assessee's appeal wherein the assessee has challenged the addition u/s 69A of the Act in respect of cash deposit in personal saving bank account maintained by the assessee. 14. Briefly, the facts of the case are that during the course of assessment proceeding, on perusal of banks statement of the saving bank account maintained by the assessee with Axis Bank, the Assessing Officer noticed that the assessee has made cash deposits on various dates totalling to Rs. 37,34,500/- in his saving bank account. Thereafter a show cause notice was issued dated 28.02.2015 wherein the assessee was asked to explain the source of such cash deposits. The Assessing Officer noted that on 9th March, 2015, the assessee failed to file any r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
