Smt. Rekha Singh Vs ITO (ITAT Jodhpur)
I found that the property purchased by the assessee is situated at Kamla Crystal and not in Kamla Enclave and the same was used for residential purposes by the assessee since its Further, the house at 6-A-42, C.S. Azad Nagar was occupied for the business of R.K. Textiles for grading and finishing job. The house which is not having any actual rental income but self occupied by assessee should be determined as per the municipal ratable value. Accordingly, the matter is restored to file of the Assessing Officer to find out the municipal ratable value of the house for computing income u/s 22 of the I.T. Act. We direct accordingly.
FULL TEXT OF THE ITAT JUDGMENT
This is an appeal filed by the assessee against the order of the CIT(A), Ajmer dated 28/02/2018 for the A.Y. 2014-15 in the matter of order u/s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’, for short]. The grounds raised by the assessee in appeal are reproduced as under:
“1. The impugned additions and disallowances made in the order u/s 143(3) dated 28.02 .2018 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted.
2. Rs. 1,20,270/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming addition of Rs. 1,20,270/- as a trading additions towards disallowances of expenses without knowing the substantiation of transactions, is contrary to the provisions of law and facts of the case. Hence, the same kindly be deleted in full.
3. Rs. 4,87,881/- The ld. CIT(A) erred in law as well as the facts of the case in confirming addition of Rs. 4,87,881/- for Travelling Expenses without knowing the substantiation of transactions and ignoring evidences, is contrary to the provisions of law and facts of the case. Hence, the same kindly be deleted in full.
4. Rs. 75,000/- The ld. CIT(A) erred in law as well as on the facts of the case in confirming addition of Rs. 75,000/- for Deemed Rental income without knowing the substantiation of the facts that the actual property situated at Kamla Cristle at Kamla Vihar, Bhilwara but wrongly understood as Kamla enclave, a posh colony at Bhilwara, is contrary to the provisions of law and facts of the case. Hence, the same kindly be deleted in full.
5. The appellant prays your honour indulgence to add, amend or alter ofor any of the grounds of the appeal on or before the date of hearing.”
2. Rival contentions have been heard and record perused. The facts in brief are that the assessee is engaged in manufacturing and trading of finished cloths. During the course of scrutiny The Assessing Officer rejected the books of accounts and made trading addition of Rs. 6,58,398/-.
3. By the impugned order, the ld CIT(A) has upheld the addition of Rs. 1,20,270/- and deleted the addition of Rs. 5,38,128/-. Against this trading addition of Rs. 1,20,270/-, the assessee is in appeal before me.
4. I have heard the rival contentions and carefully gone through the orders of the authorities below as well as the remand report and the reply of the assessee so filed during remand proceeding. From the record, I found that the reason for declining the GP ratio from 19.89% in (A.Y. 2013-14) to 18.2% in A.Y. 2014-15 is due to increasing sales by 19.21%. It is normal phenomenon of any business industry, higher the sale lower the margin and vice versa. I found that comparisons of Gross profit (GP): The Comparison of G.P. and N.P for the last three Assessment years are as under:
(Rs. In lacs)
