Sunrise Jewellers Vs ITO (ITAT Cuttack)
Addition of Rs. 1,19,848/- on ad hoc basis without specifying/pinpointing which voucher is not verifiable
After hearing both the sides and perusing the entire material available on record along with the paper book filed by the assessee as well as the orders of the authorities below and the written submissions filed by both the sides, we observe in respect of ground No.1(i) that during the course of assessment proceedings the assessee did not give details as required by the AO in respect of certain expenses as quoted (supra) and for want of sufficient evidence/vouchers. The AO disallowed the lumpsum of the total expenditure claimed. The contention of the ld. AR is not acceptable that the adhoc disallowance cannot be made. During the course of assessment proceedings the AO specifically asked to the assessee for production of the evidence/bills and vouchers but the assessee did not produce any vouchers. He has rightly confirmed 10% of the total expenditure. The AO was unable to verify the actual expenses incurred by the assessee with proper supporting vouchers. Therefore, the ground raised by the assessee is rejected. Ld. AR referred to the decision of the CIT(A) in case of Kumar Sunrise Jewellers, we are also not binding on the decision of the CIT(A), therefore, this ground is dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the assessee against the order dated 08.12.2017, passed by the CIT(A), Bhubaneswar for the assessment year 2013-2014, on the following grounds of appeal :-
(1) For that the order of assessment dated 21/03/2016 passed U/s.143(3) of the l.T. is otherwise is illegal, arbitrary and bad in law as the facts were neither duly appreciated by the learned AO as well as Learned GIT (A-1). Hence, the order of the learned CIT (A-1), BBSR as well as order of assessment passed by the learned AO is liable to be set aside.
1 (i) Expenses disallowed at Rs.1,19,848/-
For that the learned AO is erred in making addition of Rs. 1,19,848/- on ad hoc basis without specifying/pinpointing which voucher is not verifiable;
(ii) Disallowance of carriage inwards at Rs. 2,64,014/-
For that the Learned AO is erred in not providing sufficient opportunity to produce the vouchers to that effect even though the expenditure inevitable for the business;
(iii) Capital introduced by the partners disallowed U/s. 68 of the I.T. Act at Rs.12,30,000/-.
For that the learned AO is erred in making such additions in the hand of the firms even though all the partners are the assessees under his jurisdiction having perpetual source of income shown in previous returns;
(iv) Addition of Rs. 59,95,483/- on the ground of discrepancies in stocks found in course of survey.
For that the Learned AO is erred in making such addition without considering the stock reconciliation statement submitted in course of assessment proceedings by upholding the facts germinated in course of survey in absence of statement of partners on oath U/s. 131 of the I.T. Act;
(v) Cash purchase of gold at Rs.66,96,965/-disallowed U/S.40-A (3) of the I.T. Act
For that the learned AO is erred in making such huge addition without considering the genuine hardship of the sellers of the Tribal area as well as in contravention of provision under 6DD (d), 6DD(g), 6DD(k) of Income Tax Rules;
(vi) Sundry creditor at Rs. 9,56,250/- added as unexplained;
For that the learned AO is erred in making such addition without affording sufficient opportunity to submit the details of sundry creditor;
2. That the evidences which have not been produced before the Learned AO it has no relevancy to produce the same before the higher authority as per the decision of Hon’bie Apex Court and exclusively AO is empowered/authorized to verify the same.
3. That any other ground(s) incidental to the grounds of this case may kindly be allowed to urge at the time of hearing of this case;
4. That any other evidences incidental to the grounds of this case may be permitted to adduce at the time of hearing of this case.
2. Brief facts of the case are that the assessee derives income from purchase of gold and silver and after making different varieties of gold and silver ornaments sells the same to different customers. The assessee filed its return of income for the assessment year 2013-2014 on 01.10.2013 disclosing the total income of Rs.1,48,430/-. A survey operation u/s.133A of the Act was carried on in the business premises of the assessee firm on 04.04.2012. The case of the assessee was selected for scrutiny under compulsory category and statutory notices u/s.143(2) & 142(1) of the Act were issued to the assessee. In response to the same, the assessee appeared from time to time and produced books of accounts like purchase/sales registers, purchase/sales memos etc.. during the course of assessment proceedings, the AO found that the assessee could not produce the cash book and the vouchers for the various expenses could not be produced for verification purpose. During the course of assessment proceedings, it was noticed that the assessee has claimed following major expenses in the profit and loss account
