ACIT, Uttar Pradesh V. Smt. Chanan Devi, Saharanpur

ITA 4985/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77729 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 21-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: SSH SANJAY GARG; AKANSH GARG
• Keywords: Gross profit estimation
• Section: 133A; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA NO. 4985/DEL/2012 ASSESSMENT YEAR: 2009-10 ACIT, CIRCLE SAHARANPUR, UTTAR PRADESH. VS. CHANAN DEVI, C/O PROP. N.S. ENTERPRISES, KAKKAR GANJ, SAHARANPUR. AAMPD1747R (APPELLANT) (RESPONDENT) & ITA NO. 5206/DEL/2012 ASSESSMENT YEAR: 2009-10 CHANAN DEVI, C/O PROP. N.S. ENTERPRISES, KAKKAR GANJ, SAHARANPUR. AAMPD1747R VS. ACIT, CIRCLE SAHARANPUR, UTTAR PRADESH. (APPELLANT) (RESPONDENT) APPELLANT BY: MS. ASHIMA NEB, SR. DR RESPONDENT BY: S/SH. SANJAY GARG & AKANSH GARG, AD V. O R D E R PER S.V. MEHROTRA, A.M. THESE CROSS APPEALS FILED BY THE REVENUE & ASSESSE E ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-MUZAFFARNAGAR, DATE D 27/06/2012 FOR A.Y. 2009-10. ITA NOS. 4985 & 5206/D/2012 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED HER RETURN OF INCOME DECLARING NET INCOME OF RS. 6,67,770/-. THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS. 18,70,550/-, INT ER-ALIA, MAKING ADDITION OF RS. 8,54,080/- ON ACCOUNT OF LOW GP; RS. 2,50,950/- ON VARIOUS DISALLOWANCES; RS. 10,875/- ON ACCOUNT OF DIFFERENC E IN CLOSING BALANCE IN RESPECT OF SOME CREDITORS; AND RS. 81,500/- ON ACCO UNT OF LOW HOUSE HOLD WITHDRAWALS. 3. LD. CIT(A) PARTLY ALLOWED THE ASSESSEES APPEAL IN RESPECT OF ABOVE DISALLOWANCES/ADDITIONS. 3.1 BEING AGGRIEVED WITH THE ORDER OF LD. CIT(A) TH E DEPARTMENT IS IN APPEAL BEFORE US AND HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 7, 11,260/- OUT OF RS. 8,54,080/- MADE BY THE AO ON ACCOUNT OF LOW GROSS PROFIT BY APPLYING THE GP RATE OF 9.7% AS AGAINST 1 2% APPLIED BY THE ASSESSING OFFICER BY IGNORING THE FA CT THAT IN THE CASE OF SMT. AMRIT RANI PROP. M/S NIRANJAN DASS & SONS, GP WAS SHOWN @ 16.46% DURING THE RELEVANT ACCOUNTIN G PERIOD AND IN THE CASE OF BHAGAT RAM GODHA RAM, PUN JABI MARKET, SAHARANPUR, GP WAS SHOWN @ 12.30%; 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE DISALLOWANCES OF R S. 1,62,545/- OUT OF RS. 2,50,950/- MADE BY THE AO ON ACCOUNT OF VARIOUS EXPENSES BY IGNORING THE FACT THAT THESE EX PENSES WERE EITHER EXCESSIVE OR FULLY UN-VOUCHED & UNVERIFIABLE ; ITA NOS. 4985 & 5206/D/2012 3 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 10 ,875/- MADE BY THE AO ON ACCOUNT OF DIFFERENCE IN CLOSING BALAN CE IN RESPECT OF SOME CREDITORS BY IGNORING THE FACT THAT THE DIFFERENCE IN CREDIT BALANCE WAS NOTICED AT THE TIM E OF ASSESSMENT PROCEEDINGS; 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 81 ,500/- MADE BY THE AO ON ACCOUNT OF LOW HOUSE HOLD EXPENSES BY IGNORING THE FACT THAT THE PERSONAL WITHDRAWALS SHOWN BY THE ASSESSEE WERE CONSIDERED TO BELOW. 4. APROPOS GROUND NO. 1, THE AO OBSERVED THAT THE T RADING RESULTS OF THEN ASSESSEE WERE AS UNDER: ASSESSMENT YEAR 2007-08 2008-09 2009-10 SALES 2,45,16,461/- 2,53,18,411/- 3,09,24,363/- GROSS PROFIT 18,68,154/- 19,66,960/- 24,06,843/- GROSS PROFIT RATE 7.61% 7.76% 7.78% NET PROFIT 1,53,520/- 1,71,580/- 1,38,097/- NET PROFIT RATE 0.63% 0.67% 0.44% 4.1 HE POINTED OUT THAT THE GROSS PROFIT SHOWN BY T HE ASSESSEE WAS EXTREMELY LOW IN COMPARISON TO OTHER CASES DEALING IN THIS TRADE. IN THIS REGARD HE POINTED OUT THAT SMT. AMRIT RANI, PROP. M /S NIRANJAN DAS & SONS, SAHARANPUR (SISTER CONCERN) GP @ 16.46% HAD BEEN SH OWN FOR THE A.Y. 2009-10. IN THE CASE OF M/S BHAGAT RAM GODHA RAM, PUNJABI MARKET, SAHARANPUR, GP RATE OF 12.43% HAD BEEN SHOWN FOR TH E SAME ASSESSMENT YEAR. HE, THEREFORE, APPLIED A GP RATE OF 12% ON T HE SALES SHOWN AT RS. 3,09,24,363/- AS AGAINST 7.78% DECLARED BY THE ASSE SSEE AND WORKED OUT THE GP ADDITION AT RS. 13,04,080/-. HE POINTED OUT THAT ASSESSEE HAD ITA NOS. 4985 & 5206/D/2012 4 DISCLOSED RS. 4,50,000/- TO COVER UP THE DISCREPANC Y IN STOCK AT THE TIME OF SURVEY U/S 133A OF THE I.T. ACT AND, THEREFORE, THE ADDITION WAS RESTRICTED TO RS. 8,54,080/-. LD. CIT(A) HAD CALLED FOR A REMAND REPORT ON THE SUBMISSIONS MADE BY THE ASSESSEE AND THE AO HAD SUB MITTED ITS REMAND REPORT VIDE LETTER DATED 18 TH MAY, 2012. THE AO IN REMAND REPORT HAD RELIED ON VARIOUS DECISIONS OF HONBLE COURTS IN SUPPORT O F TRADING ADDITION TO WHICH ASSESSEE HAD FILED REJOINDER WHICH HAS BEEN REPRODU CED IN LD. CIT(A)S ORDER IN PARA 3.1.1. 4.2 AFTER CONSIDERING THE ASSESSEES SUBMISSIONS IN DETAIL, LD. CIT(A) CONCLUDED THAT GP IS TO BE ESTIMATED @ 9.7% AND ON THAT BASIS COMPUTED THE ADDITION OF RS. 1,42,820/- AS UNDER: TOTAL TURNOVER RS. 3,09,24,363/- GP @ 9.7% RS. 29,99,663/- LESS GP DECLARED RS. 24,06,843/- LESS AMOUNT SURRENDERED RS. 4,50,000 /- RS. 28,56,843 /- TOTAL : RS. 1,42,820 /- THUS, HE RESTRICTED THE ADDITION TO RS. 1,42,820/-. 5. LD. DR SUBMITTED THAT AO HAD ADOPTED THE GP RATE OF SIMILAR BUSINESSES AND, THEREFORE, THE SAME SHOULD HAVE BEE N ACCEPTED. 5.1 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. 6. ADMITTEDLY, THE AO HAS NOT REJECTED THE BOOKS OF ACCOUNT BUT ASSESSEE IN COURSE OF SURVEY HAD SURRENDERED THE AMOUNT OF R S. 4,50,000/- TO COVER UP THE DISCREPANCY IN STOCK AND OTHER ITEMS FOUND A T THE TIME OF SURVEY. ITA NOS. 4985 & 5206/D/2012 5 THEREFORE, THE BOOKS OF ACCOUNT WERE NOT RELIABLE. THE ESTIMATION MADE BY LD. CIT(A) IS QUITE REASONABLE CONSIDERING THE ENTI RETY OF FACTS AND CIRCUMSTANCES PARTICULARLY BECAUSE IN THE CASE OF M /S NIRANJAN DAS & SONS, SAHARANPUR, THE CONCERN WAS DEALING IN RETAIL TRADI NG OF GENTS SUITING AND SHIRTING, WHEREAS THE ASSESSEE DEALT IN WHOLESALE A S WELL AS THE RETAIL TRADING OF LADIES SUITS. THEREFORE, THERE WAS NO B ASIS TO DRAW COMPARISON WITH THIS FIRM. SIMILARLY, M/S BHAGAT RAM GODHA RA M WAS DEALING IN RETAIL AS WELL AS WHOLESALE TRADING OF BRANDED GENTS SUITI NG AND SHIRTING, WHEREAS ASSESSEE DEALT IN WHOLESALE AS WELL AS RETAIL TRADI NG OF LADIES SUITS. THEREFORE, THE TRADING RESULTS OF THIS FIRM WERE AL SO NOT THE GUIDING FACTOR. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). 7. IN THE RESULT, THIS GROUND IS DISMISSED. 8. BRIEF FACTS APROPOS GROUND NO. 2 ARE THAT AO HAD MADE DISALLOWANCES IN RESPECT OF VARIOUS EXPENSES AS UNDER: S.NO. HEAD OF EXPENDITURE TO WHICH AMOUNT DEBITED BY ASSESSEE AMOUNT CLAIMED IN PROFIT & LOSS ACCOUNT REASON FOR DISALLOWANCE OR DISALLOWANCE MADE AMOUNT DISALLOWED 1. DIRECT EXPENSES 2,75,711/- A) PARTLY VOUCHED B) ASSESSEE COULD NOT FURNISHED ANY SATISFACTORY EXPLANATION. 2. A) DISAWAR EXPENSES B) SHOP EXPENSES C) CUSTOMER WELFARE D) GENERATOR EXPENSES E) PACKING EXPENSES F) TRAVELLING EXPENSES A) 71,773/- B) 46,424/- C) 22,309/- D)15,000/- E)16,591/- F) 58,186/- NO VOUCHER/EVIDENCE PRODUCED BY ASSESSEE. DETAILS OF PERSONS PURPOSES AND TRAVELING NOT GIVEN. 75,000/- 3. SALARY 9,32,100/- A) SALARY/ATTENDANCE REGISTER NOT MAINTAINED . B) SALARY PAID TO FAMILY MEMBERS OF HIGHER SIDE IN COMPARISON TO OTHER EMPLOYEES 1,00,000/- 4. TELEPHONE EXPENSES 21,495/- POSSIBILITY OF PERSONAL USE COULD NOT BE RULED OUT 5,375/- (BEING 1/4 TH OF TOTAL EXPENSES MADE) 5. CAR EXPENSES 25,950/- NO CAR SHOWN IN THE TABLE OF FIXED ASSETS. 25,950/- ITA NOS. 4985 & 5206/D/2012 6 TOTAL 2,50,950/- 9. LD. CIT(A), AFTER CONSIDERING THE REMAND REPORT OF THE AO AND REJOINDER OF THE ASSESSEE, DELETED THE ADDITION OF RS. 50,000 /- UNDER THE HEAD DIRECT EXPENSES, INTER-ALIA, OBSERVING THAT THERE WAS ONL Y MARGINAL INCREASE BY .08% DUE TO INCREASE IN FREIGHT RATE. FURTHER, THE ASSESSEE HAD ALSO PROVIDED THE DETAILS OF FREIGHT AND CARTAGE RATE PA ID AGAINST EACH PURCHASE BILL FOR THE PERIOD FROM 20.11.2008 TO 31.03.2009. HE FURTHER OBSERVED THAT ASSESSEE HAD MAINTAINED GOODS RECEIPT NOTE WHICH WE RE ATTACHED WITH THE PURCHASE BILLS. FURTHER, THE AO IN THE REMAND REPO RT MERELY REITERATED ITS FINDINGS GIVEN IN THE ASSESSMENT ORDER AND DID NOT CONTROVERT THE DETAILS AND EVIDENCES FURNISHED BY THE ASSESSEE. AS REGARDS TH E ADDITION OF RS. 75,000/- IN RESPECT OF OTHER EXPENSES, THE LD. CIT( A) RESTRICTED THE ADDITION TO RS. 34,512/- BEING 15% OF THE EXPENSES CLAIMED BY A SSESSEE. AS REGARDS THE DISALLOWANCE UNDER THE HEAD SALARY OF RS. 1 LA KH, LD. CIT(A) RESTRICTED THE DISALLOWANCE TO RS. 50,000/-, INTER-ALIA, OBSER VING AS UNDER: THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE AP PELLANT, REMAND REPORT OF THE AO AND REJOINDER OF THE APPELL ANT HAVE BEEN CAREFULLY CONSIDERED. IT IS OBSERVED THA T THE AO HAD MADE ADDITION OF RS. 1,00,000/- BEING DISALLOWA NCE OF EXPENSES DEBITED UNDER THE HEAD SALARY ON THE GRO UND THAT NO SALARY/ATTENDANCE REGISTER WAS MAINTAINED. FURTHER, SALARY PAID TO FAMILY MEMBERS WAS ON THE H IGHER SIDE IN COMPARISON TO OTHER EMPLOYEES. ON THE OTHE R HAND THE APPELLANT HAS CONTENDED THAT SALARY PAID IN TER MS OF ITA NOS. 4985 & 5206/D/2012 7 PERCENTAGE OF SALES IS LOWER BY 0.17%. FURTHER, IT HAS BEEN CONTENDED THAT THE INDIVIDUAL SALARY PAID TO F AMILY MEMBERS WAS LOWER THAN THE SALARY PAYABLE TO A CLER K OF A BANK/STATE GOVERNMENT/ANY CORPORATE HOUSE. THE APPELLANT HAS FURNISHED COPY OF ACCOUNT SALARY IN T HE LEDGER OF THE APPELLANT. IT IS OBSERVED THAT THE A O HAS NOT BROUGHT ANY ADVERSE MATERIAL EVIDENCE ON RECORD TO SUGGEST THAT THE SALARY PAID TO FAMILY MEMBERS WAS EXCESSIVE. ON THE OTHER HAND, THE APPELLANT HAS NO T MAINTAINED VOUCHERS IN RESPECT OF PAYMENT OF SALARY . FURTHER, NO SEPARATE SALARY REGISTER/ATTENDANCE REGISTER/MUSTER ROLL HAVE BEEN MAINTAINED BY THE AP PELLANT. FURTHERMORE THE APPELLANT HAS NOT FURNISHED NATURE OF DUTIES PERFORMED BY THE EMPLOYEES WITH REFERENCE TO EDUCATIONAL QUALIFICATION. KEEPING IN VIEW THE FAC T THAT SALARY PAID TO STAFF HAS BEEN ALLOWED BY THE AO IN THE PRECEDING YEARS, THEREFORE, IT WOULD BE REASONABLE AND JUSTIFIED IF THE ADDITION IS RESTRICTED TO RS. 50,0 00/- WHICH IS HEREBY CONFIRMED. THE BALANCE AMOUNT OF RS. 50,000 /- IS DIRECTED TO BE DELETED. GROUND NO. 8 IS PARTLY ALL OWED. 10. AS REGARDS, THE DISALLOWANCE OF RS. 25,950/- UN DER THE HEAD CAR EXPENSES, LD. CIT(A) RESTRICTED THE DISALLOWANCE T O 15% BEING RS. 3,893/-, INTER-ALIA, TAKING NOTE OF THE FACT THAT THE CAR EX PENSES WERE ACTUALLY INCURRED ON ACCOUNT OF PETROL REIMBURSED TO ONE SHRI SUSHANT GANDHI, A STAFF MEMBER FOR USING HIS CAR WHILE GOING ON TOURS TO NEARBY AR EAS FOR COLLECTION FROM DEBTORS AND FOR OBTAINING ORDERS FOR THE ASSESSEE F IRM. ITA NOS. 4985 & 5206/D/2012 8 10.1 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. 11. WE FIND OURSELVES IN AGREEMENT WITH THE ORDER O F LD. CIT(A) RESTRICTING THE DISALLOWANCES TO REASONABLE EXPENDITURE AFTER C ONSIDERING IN DETAIL THE REASONING AND EXPLANATION GIVEN BY THE ASSESSEE. DEPARTMENT HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO CONTROVERT THE FA CTUAL ASPECTS PLEADED BEFORE LD. CIT(A) WHICH HE HAS NOTED IN HIS ORDER, REPRODUCED ABOVE. 11.1 WE, ACCORDINGLY, CONFIRM THE ORDER OF LD. CIT( A) ON THIS ISSUE. 12. IN THE RESULT, THIS GROUND IS DISMISSED. 13. BRIEF FACTS APROPOS GROUND NO. 3 ARE THAT IN CO URSE OF ASSESSMENT PROCEEDINGS, NOTICES U/S 133(6) WERE ISSUED TO THE CREDITORS SHOWN IN THE BALANCE SHEET. IN RESPECT OF THE FOLLOWING CREDITO RS, DIFFERENCE IN CREDIT BALANCE WAS NOTICED AS UNDER: S.NO. NAME & ADD. OF THE CREDITORS BALANCE, AS SHOWN BY THE ASSESSEE BALANCE, AS SHOWN BY THE CREDITOR DIFFERENCE 1. VARUNDEV OVERSEAS (P) LTD. 41,860/- 36,440/- 5,450/- 2. BEMI TEX 65,575/- 60,150/- 5,425/- TOTAL 10,875/- 13.1 THEREFORE, THE AO MADE AN ADDITION OF RS. 10,8 75/-. LD. CIT(A) DELETED THE ADDITION, INTER-ALIA, OBSERVING AS UNDE R: THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE AP PELLANT, REMAND REPORT OF THE AO AND REJOINDER OF THE APPELL ANT HAVE BEEN CAREFULLY CONSIDERED. IT IS OBSERVED THA T THE AO HAD MADE ADDITION OF RS. 10,875/- AS THERE WAS DIFF ERENCE ITA NOS. 4985 & 5206/D/2012 9 IN CLOSING BALANCE SHOWN BY VARUNDEV OVERSEAS (P) L TD. (RS. 5450/-) AND BEMI TEX (RS. 5,425/-). ON THE OT HER HAND, THE APPELLANT HAS CONTENDED THAT THE APPELLAN T WAS ALLOWED AT AN AGREED RATE OF DISCOUNT BY THE CREDIT ORS, SUBJECT TO THE CONDITION THAT THE PAYMENT WAS MADE WITHIN TIME. IN VIEW OF THE ABOVE, THE APPELLANT ACCOUNTE D FOR THE DISCOUNT AT THE TIME OF MAKING PAYMENTS AND ALSO RA ISED A DEBIT NOTE TO THE CONCERNED PARTY. SOME OF THE PAR TIES ACCOUNT FOR THE CASH DISCOUNTS ON THE DATE OF ISSUI NG BILLS ITSELF WITHOUT MENTIONING THE SAME ON THE PURCHASE BILLS. AS SUCH, THE PAYMENT OF BILLS OUTSTANDING AT THE EN D OF THE YEAR WERE MADE BY THE APPELLANT IN THE NEXT YEAR, T HE DISCOUNT/RATE DIFFERENCE WAS ACCOUNTED FOR BY THE APPELLANT. AS PER THE APPELLANT THE COPY OF ACCOUN T OF NEXT YEAR I.E. 2010-11 OF THE ABOVE REFERRED TWO PARTIES WERE SUBMITTED TO THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEREIN THE AFORESAID AMOUNTS STOOD DEB ITED ON THE DATE OF PAYMENT MADE. THE APPELLANT HAS FUR NISHED COPIES OF ACCOUNT OF THE AFORESAID TWO PARTIES AS O N 31.03.2010 WHEREIN THE AMOUNT OF RS. 5,450/- HAS BE EN DEBITED ON 01.05.2009 IN THE ACCOUNT OF VARUNDEV OVERSEAS P. LTD. SURAT AGAINST RATE DIFFERENCE. SI MILARLY IN THE CASE OF BEMI TEX, SURAT THE AMOUNT OF RS. 5, 435/- HAD BEEN DEBITED ON 01.05.2009 AGAINST RATE DIFFERE NCE. THUS, THEN APPELLANT HAS RECONCILED THE DIFFERENCE IN CLOSING BALANCE TOTALING TO RS. 10,875/- (RS. 5,450 /- + RS. 5,435/-). IN THE LIGHT OF THE ABOVE FACTS IT IS HE LD THAT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 10,8 75/-. ITA NOS. 4985 & 5206/D/2012 10 THE SAME IS DIRECTED TO BE DELETED. GROUND NO. 10 IS ALLOWED. 14. HAVING HEARD BOTH THE PARTIES, WE DO NOT FIND A NY REASON TO DIFFER FROM THE FINDINGS OF LD. CIT(A) BECAUSE THE ASSESSEE HAD DULY RECONCILED THE DIFFERENCE IN CLOSING BALANCE. 15. IN THE RESULT, THIS GROUND IS DISMISSED. 16. BRIEF FACTS APROPOS GROUND NO. 4 ARE THAT ASSES SEE HAD SHOWN WITHDRAWALS FOR HOUSEHOLD AT RS. 38,500/-. THE AO, TAKING NOTE OF THE FACT THAT THE FAMILY OF THE ASSESSE COMPRISED OF HERSELF , SON AND DAUGHTER-IN-LAW AND THE TOTAL WITHDRAWALS MADE BY THE FAMILY MEMBER S WERE TO THE TUNE OF RS. 3,43,000/-, CONCLUDED THAT THE SAME WERE LOW. HE ESTIMATED THE HOUSEHOLD WITHDRAWALS AT RS. 10,000/- PER MONTH AND MADE AN ADDITION OF RS. 81,500/- (RS. 1,20,000/- - RS. 38,500/-). 17. LD. CIT(A) DELETED THE ADDITION OBSERVING AS UN DER: THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE AP PELLANT, REMAND REPORT OF THE AO AND REJOINDER OF THE APPELL ANT HAVE BEEN CAREFULLY CONSIDERED. IT IS OBSERVED THA T THE AO HAD MADE ADDITION OF RS. 81,500/-ON THE GROUND THAT THE APPELLANT HAD MADE WITHDRAWALS FOR HOUSEHOLD EXPENS ES ONLY AT RS. 38,500/- WHICH HELD AS LOW KEEPING IN V IEW THE STATUS OF THE APPELLANT. ON THE OTHER HAND, IT HAS BEEN VEHEMENTLY ARGUED THAT THE APPELLANTS FAMILY CONSI STED OF SELF, SON AND DAUGHTER-IN-LAW AND TOTAL CONTRIBUTIO N MADE BY THE FAMILY MEMBERS WAS AT RS. 3,43,000/-. IT HA S FURTHER BEEN ARGUED THAT THE QUANTUM OF CONTRIBUTION MADE B Y ITA NOS. 4985 & 5206/D/2012 11 EACH FAMILY MEMBERS IS THE OUTLOOK OF THE APPELLANT AND IT IS NOT A CASE OF THE AO TO DECIDE THE SAME. IT IS OBSERVED THAT THOUGH THE APPELLANT HAS NOT SIGNIFICANTLY CON TRIBUTED TOWARDS WITHDRAWALS FOR HOUSEHOLD EXPENSES BUT AT T HE SAME TIME THE AO CANNOT LOSE SIGHT OF THE FACT THAT THE OTHER FAMILY MEMBERS HAVE ALSO CONTRIBUTED TO SUCH EXPENSES WHICH AGGREGATE TO RS. 3,43,500/- WHICH AR E HELD AS ADEQUATE TO MEET THE REQUIREMENTS OF THE APPELLA NTS FAMILY. IN LIGHT OF THE ABOVE FACTS IT IS HELD THA T THE AO WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 81,500/ -. THE SAME IS DIRECTED TO BE DELETED. GROUND NO. 11 IS A LLOWED. 18. HAVING HEARD BOTH THE PARTIES, WE DO NOT FIND A NY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) BECAUSE THE FINDINGS O F LD. CIT(A) THAT ASSESSEE HAD NOT SIGNIFICANTLY CONTRIBUTED TOWARDS WITHDRAWA LS OF HOUSEHOLD EXPENSES AS FAMILY MEMBERS HAD SUBSTANTIALLY CONTRIBUTED TOW ARDS THE FAMILY REQUIREMENTS HAVE NOT BEEN CONTROVERTED BY DEPARTME NT. WE, ACCORDINGLY, CONFIRM THE ORDER OF LD. CIT(A). 19. IN THE RESULT, THE DEPARTMENTS APPEAL IS DISMI SSED. 20. NOW, WE TAKE UP THE ITA NO. 5206/D/2012. THE A SSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. BECAUSE THE LD. CIT(APPEALS) HAS GROSSLY ERRED IN LAW AND ON FACTS IN APPLYING GP RATE OF 9.7% AS AGAINST 9.24% DECLARED BY THE APPELLANT AND THEREBY CONFIRMING PA RT ADDITION OF RS. 1,42,820/- IN THE INCOME OF THE APP ELLANT. 1.1BECAUSE THE AO DID NOT FIND ANY DISCREPANCY IN T HE BOOKS OF ACCOUNTS AND, THEREFORE, THE LD. CIT(APPEALS) WA S ITA NOS. 4985 & 5206/D/2012 12 WHOLLY UNJUSTIFIED IN APPLYING THE GP RATE OF 9.7% (AS AGAINST 12% BY ASSESSING OFFICER) INSTEAD OF 9.24% DECLARED BY THE APPELLANT. 1.2BECAUSE THE APPLICATION OF GP RATE OF 9.7% BY TH E LD. CIT(APPEALS) AS AGAINST 12% MADE BY THE AO IS ALSO WHOLLY ARBITRARY BEING NOT BASED ON ANY MATERIAL AN D, THEREFORE, PARTIAL ADDITION SUSTAINED OF RS. 1,42,8 20/- IS CONTRARY TO FACTS AND LAW. 2. BECAUSE EXPENSES, SHOP EXPENSES, CUSTOMER WELFAR E, GENERATOR EXPENSES, PACKING EXPENSES, TRAVELING EXP ENSES TOTALING RS. 2,30,283/- WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND, THEREF ORE, THE LD.CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING PARTLY DISALLOWANCE OF RS. 34,512/- OUT OF SUCH EXPENSES. 3. BECAUSE THE LD. CIT(APPEALS) HAS ERRED IN LAW AN D ON FACTS IN CONFIRMING A DISALLOWANCE OF RS. 50,000/- IN SAL ARY ACCOUNT OUT OF TOTAL DISALLOWANCE MADE OF RS. 1,00, 000/- BY LD. AO. 21. GROUND NO. 1 IS IDENTICAL TO GROUND NO. 1 OF DE PARTMENTS APPEAL AND, THEREFORE, FOR THE REASONS STATED FOR THE SAID GROU ND IN DEPARTMENTS APPEAL, THE ASSESSEES APPEAL IS DISMISSED. 22. GROUND NO. 2 AND 3 OF THE ASSESSEES APPEAL HAV E BEEN CONSIDERED BY US AND, THEREFORE, FOR THE REASONS GIVEN THEREIN BO TH THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 23. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISS ED. ITA NOS. 4985 & 5206/D/2012 13 24. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/06/2014 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 02/06/2014 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR