ITO, Kanpur V. Shri Prasant Kumar Gupta, Kanpur

ITA 459/LKW/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83319 (ITAT-LUCKNOW)
• Duration Of Justice: 4 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 28-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Keywords: Gross profit estimation; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 459/LKW/2010 ASSESSMENT YEAR: 2006 - 07 INCOME TAX OFFICER 2(3) KANPUR V. SHRI. PRASANT KUMAR GUPTA PROP. M/S ANMOL SALT TRADERS 58, INDUSTRIAL ESTATE KANPUR PAN: ADUPG3932A (APP ELL ANT) (RESPONDENT) ITA NO. 468/LKW/2010 ASSESSMENT YEAR: 2006 - 07 SHRI. PRASANT KUMAR GUPTA PROP. M/S ANMOL SALT TRADERS 58, INDUSTRIAL ESTATE KANPUR V. INCOME TAX OFFICER 2(3) KANPUR PAN: ADUPG3932A (APP ELL ANT) (RESPONDENT) DEPARTMENT BY: SHRI. ALOK MITRA, D.R. ASSESSEE BY: SHRI. RAKESH GARG, ADVOCATE DATE OF HEARING: 15 0 7 2014 DATE OF PRONOUNCEMENT: 10 0 9 2014 O R D E R PER SUNIL KUMAR YADA V: THESE CROSS APPEALS ARE PREFERRED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) PERTAINING TO ASSESSMENT YEAR 2006 - 07. SINCE THESE APPEALS WERE HEARD TOGETHER, THESE ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORDER. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : 2 . CERTAIN GROUNDS IN THESE APPEALS ARE COMMON AND THEY ARE REQUIRED TO BE ADJUDICATED SIMULTANEOUSLY. WE, HOWEVER, FOR THE SAKE OF REFERENCE REPRODUCE THE GROUNDS OF APPEAL RAISED IN BOTH THE APPEALS AS UNDER: - GROUNDS IN ITA NO.459/LKW/2010 : BY THE REVENU E: 1 . THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS OF THE CASE WHILE RESTRICTING THE ADDITION OF RS.15,48,750 / - ON ACCOUNT OF DISALLOWANCE OF CLAIM OF LOSS O F STOCK AND THE ADDITION OF RS. 8,31,376 / - ON ACCOUNT OF E STIMATION OF S ALES AND OF GROSS PROFIT TO RS. 4,87,631 / - WITHOUT APPRECIATING THE FACTS OF THE CASE AS ENUMERATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 2 . THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS OF THE CASE WHILE RESTRICTING THE ADDITION OF RS. 1,42,000 / - ON ACCOUNT OF SALARY TO AGENTS TO RS.68,000/ - WITHOUT APPRECIATING THE FACTS OF THE CASE AS ENUMERATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 3 . THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) - II, KANPUR HAS ERRED IN LAW AND ON FACTS OF THE CASE WHILE RESTRICTING THE ADDITION OF RS.50,000/ - ON ACCOUNT OF VEHICLE RUNNING EXPENSES AND ADDITION OF RS.7,17,013/ - ON ACCOUNT OF FREIGHT CHARGES TO RS.2,00,000/ - WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDING. 4 . THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE CONCLUSION OF THE ASSESSING OFFICER IS INCORRECT. AS SUCH HIS ORDE R IS BAD IN LAW. THEREFORE, THE ORDER OF THE ID. C1T (A) - II, KANPUR DATED 30.04.2010 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 12.12.2007 TO BE RESTORED. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : GROUNDS IN ITA NO.4 68 /LKW/2010 : BY THE ASSESSEE : 1 . BECAUSE THE CIT (AP PEALS) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING AN ADDITION OF RS.4,87,000/ - ON ACCOUNT OF LOW GROSS PROFIT RATE, WHICH ADDITION BEING CONTRARY TO FACTS, BAD IN LAW BE DELETED. 2 . BECAUSE THE CIT (APPEALS) HAS FAILED TO APPRECIATE THAT IF THE ADDITION OF RS .7,12,625 / - MADE BY HIM ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK IS CONSIDERED WITH THE TRADING ACCOUNT RECASTED, THERE WOULD BE NO FALL IN THE GROSS PROFIT RATE AS ESTIMATED BY HIM, THE ADDITION OF RS.4,87,000/ - BE DELETED. 3 . BECAUSE THERE BEING NO DE FECTS IN THE BOOKS OF ACCOUNTS, THE CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN WRONGLY APPLYING THE G.P. RATE OF 18% AS AGAINST 15% DECLARED BY THE ASSESSEE. 4 . BECAUSE WITHOUT PREJUDICE TO THE ABOVE WHEN AN ADDITION HAS BEEN MADE BY REJECTING THE BOOKS O F ACCOUNT AND APPLYING A GROSS PROFIT RATE, THEN THE ADDITION OF RS.7,12,625/ - FOR UNDER VALUATION OF STOCK NEED NOT BE MADE, OR VICE - VERSA. 5 . BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING AN ADDITION OF RS.68,000/ - OUT OF SALARY PAID TO THE AGENT, WHICH IS CONTRARY TO FACTS BAD IN LAW AND BE DELETED. 6 . BECAUSE THE CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING AN ADDITION OF RS.2,00,000/ - ON ADHOC AND LUMP SUM BASIS OUT OF FREIGHT CHARGES, WHICH ADDITION IS CONTRARY TO FACTS, BAD IN LAW BE DELETED. 7 . BECAUSE THE EXPENSES HAVING BEEN INCURRED YEAR AFTER YEAR AND LOOKING TO THE NATURE OF BUSINESS AND NO SPECIFIC DEFECTS HAVING BEEN POINTED OUT BY THE CIT (APPEALS), THE CIT(APPEALS) WAS NOT JUSTIFIED IN IGNORING THE EXPLANATION FILED AND M AKING ART ADHOC ADDITION OF RS.2,00,000/ - . PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : 8 . BECAUSE THE CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING AN ADDITION OF RS.60,000/ - ON ACCOUNT OF LOW WITHDRAWALS, WHICH ADDITION IS CONTRARY TO FACTS, BAD IN LAW BE DELETED. 3 . THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE IS A TRADER OF SALT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOT IC ED THAT THE ASSESSEE HAS NOT MAINTAINED ANY STOCK BOOK OR STOCK REGISTER AND THE ASSESSEE WAS ASKED TO GIVE THE BREAKUP OF THE CLOSING STOCK AS SHOWN BY HIM IN THE PROFIT AND LOSS ACCOUNT. IN RESPONSE THERETO , ASSESSEE HAD SUBMITTED CERTAIN DETAI LS OF CLOSING STOCK VALUATION AT THREE OCCASIONS AND EACH TIME THE VALUATION WAS DIFFERENT BOTH IN TERMS OF QUANTITY AND ALSO I N VALUE (FOR EACH OF THE ITEMS) IN THE INVENTORY. THE DETAILS FURNISHED BY THE ASSESSEE ARE AS UNDER: - QTY.(BAGS) VALUE (RS.) KHARA NAMAK 12403 402725.41 PISA NAMAK 9619 454216.35 PACKET NAMAK 953 96581.41 TOTAL 22975 BAGS RS.953523.17 3 . 2 . 2 . FURTHER BREAK UP IN THIS REGARD WAS ALSO SUBMITTED BY THE ASSESSEE, WHICH IS AS UNDER: - KHADA NAMAK PISA NAMAK PACKET NAMAK TOTAL O.S 31572 12865 68 44505 PURCHASE 108861 83580 4390 196831 TRANSFER - 6350 6350 12700 SALE 128030 64350 9855 20 2235 LOSS - 16126 - 16126 CLOSING STOCK 12403 9619 953 22935 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : 4 . AS PER ABOVE DETAILS, ASSESSEE SUFFERED A LOSS OF 16,126 BAGS OF PISA NAMAK. THEREAFTER ANOTHER VALUATION WAS FILED WHEREIN THERE WAS NO BREAKUP OF QUANTITY BETWEEN KHADA, PI SA OR PACKET SAULT BUT IT CONTAINED THE DETAILS WITH RESPECT OF THE DATE, BILL NO., NAME OF THE SUPPLIER, QUANTITY AND RATE OF PURCHASE. HAVING CAREFULLY EXAMINED THE DETAILS FURNISHED BY THE ASSESSEE AND LOOKING TO THE DISCREPANCY IN THE VALUATION OF CLO SING STOCK, THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME OF THE ASSESSEE AFTER DISALLOWING THE CLAIM OF LOSS AT RS.15,48,700/ - AT G.P. RATE OF 18% INSTEAD OF 15% OF RS.8,31,376/ - . 5 . AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFO RE THE LD. CIT(A) AND THE LD. CIT(A) HAVING ACCEPTED THE EXPLANATIONS FURNISHED BY THE ASSESSEE RECASTED THE CLOSING STOCK AT RS.16,66,148/ - AND AFTER ALLOWING THE DECLARED VALUE OF CLOSING STOCK, ADDITION OF RS.7,12,625/ - WAS MADE. BESIDES, THE LD. CIT(A ) ALSO DELETED THE ADDITION OF RS.15,48,720/ - ON ACCOUNT OF DISALLOWANCE OF LOSS AND RESTRICTED THE ADDITION OF RS.8,31,376/ - MADE ON ACCOUNT OF G.P. TO RS.4,87,631/ - , HAVING OBSERVED THAT THE G.P. ADDITION WILL TAKE CARE OF UNDER REPORTING OF SALES AND IN FIRMITIES IN THE ACCOUNT. 6 . AGGRIEVED, THE REVENUE AS WELL AS THE ASSESSEE PREFERRED APPEAL S BEFORE THE TRIBUNAL BY RAISING THE AFOREMENTIONED GROUNDS IN THEIR RESPECTIVE APPEALS. 7 . GROUNDS NO.1 TO 4 IN THE ASSESSEES APPEAL AND GROUND NO.1 IN THE REVENUES AP PEAL RELATE TO THE CONTROVERSY WITH REGARD TO THE VALUATION OF CLOSING STOCK AND ESTIMATION OF G.P. RATE. 8 . THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE FURNISHED COMPLETE DETAILS OF CLOSING STOCK AND THE SAME SHOULD HAVE BEEN ACCEPTED BY THE LOWER AUTHORITIES, BUT THE LD. CIT(A) RECASTED THE CLOSING STOCK AND MADE THE ADDITIONS OF RS.7,12,625/ - ON ACCOUNT OF PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : UNDERVALUATION OF CLOSING STOCK . THE LD. CIT(A) HAS ALSO RESTRICTED THE ADDITION OF RS.8,31,376/ - TO RS.4,87,631/ - INSTEAD OF DELETI NG THE SAME MADE ON ACCOUNT OF ESTIMAT ION OF GROSS PROFIT. W HEREAS THE LD. D.R., ON THE OTHER HAND, HAS CONTENDED THAT UNDISPUTEDLY ASSESSEE HAS NOT MAINTAINED THE STOCK REGISTER AND AT DIFFERENT POINT OF TIME THE ASSESSEE HAS FURNISHED DIFFERENT VALUATIO N OF CLOSING STOCK, IN WHICH THERE WERE DISCREPANCIES IN THE QUANTITY AS WELL AS IN THE VALUATION. THE LD. D.R. HAS FURTHER CONTENDED THAT BEFORE THE LD. CIT(A) ASSESSEE FURNISHED A NEW CHART GIVING THE DETAILS OF CLOSING STOCK. IN THAT CHART , THERE WERE SUBSTANTIAL DISCREPANCIES IN THE QUANTITY EARLIER SHOWN BY THE ASSESSEE BEFORE THE A .O . THE DETAILS FURNISHED IN THIS NEW CHART WAS ACCEPTED BY THE LD. CIT(A) AND DELETED THE ADDITION WITHOUT CALLING REMAND REPORT OR THE COMMENTS OF THE ASSESSING OFFICER IN THIS REGARD. THE LD. D.R. HAS FURTHER INVITED OUR ATTENTION THAT IN THE DETAILS OF CLOSING STOCK FILED BY THE ASSESSEE BEFORE THE A .O. , THE QUANTIT Y OF KHADA NAMAK WAS SHOWN AT 12403 BAGS, WHEREAS IN THE REVISED STATEMENT FILED BEFORE THE LD. CIT(A), THE QUANTITY WAS SHOWN AS 607 BAGS. SIMILAR WAS THE POSITION IN THE CASE OF PISA NAMAK AND PACKET NAMAK. PISA NAMAK WAS EARLIER SHOWN AS 9619 BAGS, WHEREAS IN THE REVISED STATEMENT, IT WAS SHOWN AS 17842 BAGS. THE VALUATION OF THE CLOSING STOCK SHOWN EA RLIER AND IN THE REVISED STATEMENT WAS SIMILAR, BUT THE QUANTITY WAS DIFFERENT. THE LD. D.R. HAS FURTHER CONTENDED THAT ATLEAST THE LD. CIT(A) SHOULD HAVE CALLED REMAND REPORT OF THE ASSESSING OFFICER IN THIS REGARD BEFORE ACCEPTING THE CLAIM OF THE ASSES SEE. MOREOVER, THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE WITH REGARD TO THE LOSS OF PISA NAMAK AND THE LD. CIT(A) HAD OUTRIGHTLY ACCEPTED THE SAME; WHEREAS THE ASSESSING OFFICER HAD MADE DISALLOWANCE OF THE SAME ON ACCOUNT OF NON - FURNISHING OF ANY EVIDE NCE. BESIDES, THE ASSESSING OFFICER HAD ALSO MADE ADDITION ON ACCOUNT OF GROSS PROFIT ESTIMATED @ 18%, BUT THE SAME WAS ALSO REDUCED BY THE LD. CIT(A) BY 3% WITHOUT ASSIGNING ANY REASON. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 7 - : 9 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE HAD FURNISHED DETAILS OF CLOSING STOCK AT TWO TIMES, BUT IN BOTH THE TIMES THERE WA S DISCREPANCY IN THE QUANTITY OF DIFFERENT TYPES OF NAMAK. UNDISPUTEDLY NO STOCK REGISTER WAS MAINTAINED BY THE ASSESSEE AND LOSS IN NAMAK WAS ALSO CLAIMED ON ESTIMATE BASIS WITHOUT FURNISHING ANY EVIDENCE BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER ACCORDINGLY VALUED THE CLOSING STOCK AND DISALLOWED THE LOSS CLAIMED BY THE ASSESSEE. THEREAFTER, HE MADE G.P. ADDITION. BEFORE THE LD. CIT(A), ASSESSEE HAD FURNISHED NEW DETAILS, IN WHICH LOT OF DISCREPANCIES CAN BE NOTICED IN COMPARISON TO THE DETAILS FURNISHED EARLIER. FOR THE SAKE OF REFERENCE, WE EXTRACT THE DETAILS FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(A) AS PER ANNEXURE B AS UNDER: - CLOSING STOCK DETAILS AS PER ANNEXURE B QUANTITY RATE AMOUNT (IN BAGS) KHADA NAMAK F607 32.47 19709.29 TOTAL 607 19709.29 PISA NAMAK 815 34735.00 580 42.62 40050.37 7140 69.05 322713.08 4780 45.20 24652.40 700 51.48 32544.00 750 46.49 32895.00 748 43.86 32045.00 780 42.84 33532.00 770 42.99 30626.00 779 39.77 51022.74 TOTAL 178 42 65.50 856215.59 PACKET NAMAK 100 11550.58 100 115.51 10546.18 400 105.46 40979.44 153 102.45 14522.09 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 8 - : TOTAL 753 94.92 77598.29 TO TAL CLOSING STOCK OF THE YEAR 953523.17 TOTAL CLOSING STOCK OF THE YEA R IN QUANTITY 19202 CALCULATION OF CLOSING STOCK AS PER ANNEXURE B KHADA NAMAK PISA NAMAK PACKET NAMAK TOTAL QUANTITY QUANTITY QUANTITY QUANTITY (IN BAGS) (IN BAGS) (IN BAGS) (IN BAGS) OPENING STOCK 24440 26 68 25534 PURCHA SE 109288 83153 4390 196831 TRANSFER FROM PISA TO PISA - 9400 9400 PACKET - 6150 6150 SALE 124721 67659 9855 202235 LOSS - 928 - 928 CLOSING STOCK 6 07 17842 753 19202 10 . FROM A CAREFUL PERUSAL OF THE STATEMENT FURNISHED BEFORE THE LD. CIT(A) AND FURNISHED BEFORE THE ASSESSING OFFICER, THERE ARE SUBSTANTIAL DISCREPANCIES IN THE QUANTITY OF DIFFERENT NAMAK AND THE LD. CIT(A) DID NOT MAKE ANY EFFORT TO OBTAIN THE REASONS FOR THE DISCREPANCIES. HE HIMSELF WORKED OUT THE VALUATION OF CLOSING STOCK WITHOUT AFFORDING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO MAKE HIS COMMENTS WITH REGARD TO THE NEW WORKING FURNISHED BY THE ASSESSEE. THOUGH THE LD. CIT(A) IS ARMED WITH THE CO - TERMINUS POWER OF THE ASSESSING OFFICER, BUT DESPITE THAT HE IS ALSO FIRST APPELLATE AUTHORITY WHERE HE IS REQUIRED TO AFFORD OPPORTUNITY TO BOTH THE PARTIES. WHEN A NEW WORKING OF THE CLOSING STOCK WAS PRODUCED BEFORE THE LD. CIT(A) , THE LD. CIT(A) OUGHT TO HAVE CALLED A REMAND REPORT WITH REGARD TO THE NEW WORKING. THEN, AFTER AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFICER, THE ISSUE SHOULD HAVE BEEN ADJUDICATED, BUT THE LD. CIT(A) WITHOUT CONFRONTING THE NEW WORKING OF THE CLOSING STOCK TO THE ASSESSING OFFICER, ACCEPTED THE SAME AND HAVING TAKEN PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 9 - : COGNIZANCE OF THE NEW CLOSING STOCK, REDUCED THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF LOSS, FOR WHICH NO EVIDENCE WAS FURNISHED BY THE ASSESSEE AND ALSO ON ACC OUNT OF GROSS PROFIT. SINCE THE LD. CIT(A) HAS NOT ADJUDICATED THE ISSUE PROPERLY, WE ARE OF THE CONSIDERED OPINION THAT THIS ISSUE REQUIRES A FRESH ADJUDICATION BY THE LD. CIT(A). ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MAT TER TO HIS FILE WITH A DIRECTION TO RE - ADJUDICATE THE ISSUE AFRESH AFTER OBTAINING COMMENTS OF THE ASSESSING OFFICER WITH REGARD TO THE NEW WORKING OF CLOSING STOCK FURNISHED BY THE ASSESSEE AND T HEREAFTER ADJUDICATE THE ISSUE OF DISALLOWANCE OF LOSS, VALU ATION OF CLOSING STOCK AND GROSS PROFIT ADDITION. ACCORDINGLY, THE MATTER IS RESTORED TO THE LD. CIT(A) FOR RE - ADJUDICATION AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE PARTIES. 11 . NEXT ISSUE IN BOTH THE APPEAL IS WITH REGARD TO THE RESTRICTION OF ADD ITION OF RS.1.20 LAKHS ON ACCOUNT OF SALARY TO AGENTS TO RS.68,000/ - . 12 . IN THIS REGARD, IT IS NOTICED FROM THE ORDERS OF THE LOWER AUTHORITIES THAT THE ASSESSING OFFICER MADE DISALLOWANCE OF SALARIES PAID TO SHRI. S .K. GUPTA AND SHRI. VIJAY SHARMA. BEFORE T HE ASSESSING OFFICER, SHRI. S. K. GUPTA HAD CONFIRMED THAT HE RECEIVED SALARY, BUT SO FAR AS THE OTHER PERSON, SHRI. VIJAY SHARMA IS CONCERNED; HE CONFIRMED RECEIPT OF SALARY, AS IT WAS SIGNED BY SHRI. RAJESH KUMAR CLAIMED TO BE HIS SON. THE LD. CIT(A), R ELYING UPON THE STATEMENT OF SHRI. S. K. GUPTA, ALLOWED SALARY PAID TO HIM, BUT CONFIRMED THE ADDITION ON ACCOUNT OF SALARY PAID TO SHRI. RAJESH KUMAR/VIJAY SHARMA. SINCE N EITHER SHRI. VIJAY SHARMA N OR SHRI. RAJESH KUMAR CONFIRMED RECEIPT OF SALARY, THE L D. CIT(A) DISALLOWED THE SAME. 13 . NOW THE ASSESSEE AS WELL AS THE REVENUE ARE BEFORE US, BUT ON A CAREFUL PERUSAL OF THE ORDER OF THE LD. CIT(A), WE FIND THAT THE S INCE THE LD. CIT(A) HAS PROPERLY ADJUDICATED THE ISSUE , WE FIND NO MERIT AND ACCORDINGLY WE CON FIRM THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 10 - : 14 . THE OTHER ISSUE RELATES TO THE ADDITION MADE ON ACCOUNT OF VEHICLE RUNNING EXPENSES AND ADDITION ON ACCOUNT OF FREIGHT CHARGES. 15 . IN THIS REGARD, IT IS NOTICED THAT THE ASSESSING OFFICER HAD MADE AN ADDITION OF RS.7,17,013/ - ON ACCOUNT OF FREIGHT OUTWARDS AND RS.50,000/ - ON ACCOUNT OF VEHICLE RUNNING EXPENSES FOR THE REASON THAT THESE PAYMENTS WERE MADE ON SELF MADE VOUCHERS AND THERE WAS NO MENTION OF ANY TRUCK NUMBER. 16 . BEFORE THE LD. CIT(A), ASSESSEE CONTEN DED THAT THE PAYMENTS WERE MADE ON ACCOUNT OF FREIGHT OUTWARDS FOR A NUMBER OF YEARS AND THE PERCENTAGE OF SUCH FREIGHT TO SALES IN ALL THE PREVIOUS YEARS BETWEEN 2.17 TO 2.89; WHEREAS THE PERCENTAGE DURING THIS YEAR HAS SHOT UP TO 4.41. THEREFORE , THERE WOULD BE ENHANCEMENT IN THE FREIGHT OUTWARD EXPENSES. THE LD. CIT(A) , TAKING INTO ACCOUNT ALL THESE FACTORS , MADE AD HOC ADDITION OF RS.2 LAKHS AS THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT SUPPORTED BY BILLS AND VOUCHERS. 17 . THIS ADDITION AND DELETION W ERE CHALLENGED BY BOTH THE PARTIES BEFORE THE TRIBUNAL, BUT ON A CAREFUL PERUSAL OF THE ORDER OF THE LD. CIT(A), WE FIND THAT UNDER THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE SALES WERE INCREASED, BUT NO VOUCHERS WERE PRODUCED, AD HOC ADDITION IS REQUIRED TO BE MADE. ACCORDINGLY, THE LD. CIT(A) MADE ADDITION OF RS.2 LAKHS , IN WHICH WE DO NOT FIND ANY INFIRMITY. ACCORDINGLY, WE CONFIRM THE SAME. 18 . THE LAST GROUND IN THE ASSESSEES APPEAL IS WITH REGARD TO THE ADDITION ON ACCOUNT OF RS.60,000/ - O N ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. 19 . IN THIS REGARD, WE FIND THAT THE ASSESSING OFFICER ESTIMATED HOUSEHOLD EXPENSES AT RS.10,000/ - PER MONTH WHICH WAS REDUCED TO RS.8,000/ - PER MONTH BY THE LD. CIT(A) AND GRANTED RELIEF OF RS.60,000/ - . PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 11 - : THOUGH THE ESTI MATION AT RS.10,000/ - PER MONTH CLAIMED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER IS NOT UNREASONABLE, BUT IN THE ABSENCE OF REVENUES APPEAL WE CANNOT UPHOLD THE ORDER OF THE ASSESSING OFFICER, THEREFORE, RESTRICTION OF HOUSEHOLD EXPENSES FROM RS.10,00 0/ - TO RS.8,000/ - PER MONTH DOES NOT APPEARS TO BE UNREASONABLE. WE ACCORDINGLY CONFIRM THE ORDER OF THE LD. CIT(A) IN THIS REGARD. 20 . IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THAT OF THE ASSESSEE IS DISMISSED. O RDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENT I ONED ON THE CAPTION PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH SEPTEMBER , 2014 JJ: 2808 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )