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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld CIT(A) 19, New Delhi dated 26.06.2014 for the AY 2008-09. 2. The assessee has raised the following grounds of appeal:- “1. That the ld CIT(A)(19) has completely failed in understanding and appreciating the submissions of the appellant whereby mathematical calculation based on the books of accounts alongwith due and relevant evidences besides necessary explanations, written as well as oral, on many a time to explain the books of accounts, methods of making entries etc. Therefore, the ld CIT(A)(19)’s rejection of books of accounts which are duly audited as well as upholding the ld Assessing Authority’s order is not based on factual appreciation of the real situation but are a total failure on their part to put even two and two together as four. The appellant contests vehemently the working of the Net Profit @8% worked out to Rs. 327190/- ignoring all the additions made on account of incorrect mathematical calculation as well as disallowance of specific expenses being made part of grounds in appeal NO. 2.
2. That the ld C(T(A)(19), New Delhi has failed to understand and appreciate the commercial expediency in incurring these expenditure such as Rs. 514081/- respectively in the capacity of tenants based on the commercial decision and agreement between them and their landlord who happens to be one of the partners.
Aero Sales Vs. ITO, (Assessment Year: 2008-09) 3. That the ld CIT(A)(19), New Delhi has erred in upholding the disallowance of Rs. 59596/- out of salary expenses of Rs. 755072/- as incurred by the appellant as all the relevant details and evidences were duly filed. Assessee is doing the retail business of foot wear and employed some workers which are casual and migratory labour themselves and have no address per se to be provided to their employers and yet they are kept owing to mutual needs and benefit. The ld CITY(A)(19) upholding on the basis that salary of these employees can not be allowed because of not having address is not fair appreciation of ground realities.”
Brief facts of the case is that assessee is a partnership firm engaged in the business of trading of footwear and accessories. It filed its return on 08.09.2008 at a loss of Rs. 428826/-. The assessee was assessed u/s 143(3) of the Act vide order dated 29.10.2010 at a total income of Rs. 11002833/-. In the assessment the ld Assessing Officer has made several additions amounting to Rs. 1531659/-.
On appeal before the ld CIT(A) substantial relief was granted to the assessee however, certain additions were confirmed. During the appellant proceedings, the ld CIT(A) instead of confirming or reducing the other addition on account of trading restricted the addition to 8% of the total sales of Rs. 7839887/- at Rs. 627190/-. 5. The assessee aggrieved with the order of the ld CIT(A) preferred appeal before us. 6. The first ground of appeal is against the sustenance of net profit @8% of Rs. 62719/- on the sales of Rs. 7839887/- by the ld CIT(A). Assessee as stated on record is engaged in the business of footwear. During the assessment proceedings assessee was asked to file the details of sales to which assessee submitted that his sales are in cash and through credit cards and therefore, party-wise details were not available. The assessee submitted reconciliation of cash deposit as well as credit card sales. However, the ld AO rejected it and made an addition of Rs. 5 lacs as income of the assessee. The ld CIT(A) held that the appellant could file only reconciliation but could not file any other details as the most of the sales are in cash he estimated the 8% profit on the total turnover of Rs. Page | 2