ITA. No. 40/Hyd/2014, (Assessment Year: 2009-2010). Case: Naveen Kumar Kedia Vs Income Tax Officer. ITAT (Income Tax Appellate Tribunal)
| Case Number | ITA. No. 40/Hyd/2014, (Assessment Year: 2009-2010) |
| Counsel | For Assessee: Sri Sarang Shah and For Revenue: Sri Solgy Jose T. Kottaram |
| Judges | B. Ramakotaiah, Member (A) and Saktijit Dey, Member (J) |
| Issue | Income Tax Act |
| Judgement Date | June 13, 2014 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
Saktijit Dey, Member (J), (ITAT Hyderabad 'B' Bench)
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This appeal by the assessee is directed against the order dated 15-10-2013 of CIT(A), Hyderabad pertaining to assessment year 2009-10.
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The assessee has raised in all 10 grounds. Ground No. 1 and 10 are general in nature and therefore not required to be adjudicated upon. At the very outset, the learned AR expressed his intention to contest only ground Nos. 4, 5 and 6. In view of the above, ground Nos. 2, 3, 7, 8 and 9 are dismissed as not pressed.
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Ground No. 4 relates to CIT(A) sustaining an addition of Rs. 10 lakh on account of low gross profit, un-vouched expenses, unexplained expenses and valuation of stock.
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Briefly the facts are, the assessee is an individual engaged in the business of manufacture and sale of castor oil and cotton oil. For the impugned assessment year, he filed the return of income declaring total income of Rs. 7,58,300/-. During scrutiny assessment proceedings, the Assessing Officer after examining the trading and Profit & Loss a/c noticed that on a total turnover of Rs. 33,06,60,497/- the assessee had declared gross profit of Rs. 34,90,041/- which works out to 1.06%. Considering it to be on the low side, compared to the assessment years 2007-08 and 2008-09, the Assessing Officer that by applying the rate of 1.28% worked out gross profit to Rs. 41,99,381/- which resulted in a difference of Rs. 7,09,346/- which the Assessing Officer proposed to add. Likewise, the Assessing Officer in the said show cause notice proposed addition/disallowance on various other issues. Though the assessee submitted its explanation objecting to the proposed additions/disallowance, the Assessing Officer ultimately completed the assessment by determining the total income at Rs. 50,42,755/- on the following additions:-
i) Addition towards low gross profit Rs. 7,09,346/-
ii) Addition towards un-vouched expenditure Rs. 4,05,755/-
iii) Addition towards 40A(3) payments Rs. 4,35,220/-
iv) Addition towards donation Rs. 1,25,000/-
v) Addition towards excess paid on a/c of purchases Rs. 9,25,318/-
vi) Addition towards quality difference Rs. 3,89,921/-
vii) Addition towards interest payments Rs. 9,00,400/- and
viii) Addition towards valuation of closing stock Rs. 2,93,495/-
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Being aggrieved of the additions made in the assessment order, assessee preferred appeals before the CIT(A). Before the CIT(A), the assessee objecting to each of the additions made filed detailed written submissions. The CIT(A) after considering the submissions of the assessee in respect of the additions made restricted the disallowance to Rs. 10 lakh in respect of the additions made on account of disallowance of expenditure including the addition made on account of low gross profit.
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The leaned AR submitted before us that the assessee has not only maintained regular books of accounts but all expenditures are supported by genuine vouchers and bills and therefore without finding any defect or discrepancy in the books of accounts or any deficiency in them the Assessing Officer and the CIT(A) were not justified in making...
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