M/S Malik Cycle Parts Industries Pvt. ... vs Assessee

M/s Malik Cycle P)arts Industries Vs Income Tax Officer, Pvt. Ltd., Range-VI(1), 42-43B, Dada Nagar, Kanpur. Kanpur. PAN:AACCM2888D (Appellant) (Respondent)

Appellant by None Respondent by Shri P. K. Dey, D.R. Date of hearing 09/02/2015 Date of pronouncement 10/03/2015

ORDER

PER A. K. GARODIA, A.M.

This is an assessee's appeal directed against the order passed by learned CIT(A)-II, Kanpur dated 24/02/2014 for the assessment year 2003- 2004.

2. The grounds raised by the assessee are as under:

"1. That the CIT (Appeal) has erred in law and on facts in deciding the appeal ex-parte.

2. That the order of CIT(Appeals), deciding the appeal ex-

parte, is in violation of principles of natural justice, fair- play and equity.

3. That the assessing officer has erred in law and on facts in rejecting the book of accounts of the assessee company and thereafter making an addition of Rs.2,83,451/- on account of suppressed sale.

2 4. That the assessing officer has erred in law and on facts in justifying rejection of book of accounts and thereafter making an addition of Rs.2,83,451/- on account of suppressed sale, on the basis of (a) increase in generation of Scarp from 9.71% in the immediately preceding year to 12.12% in the current year (b) increase in expenses under the head furnace oil expenses.

5. That the AO has erred in law and on facts in restricting the generation of scrap to 10.92% as against 12.12% and thereafter making an addition of Rs.2,83,451/- calculated at the rate of 1.2% of disclosed sale.

6. That the AO, in rejecting book of account, has erred in law and on facts as no defect was found by him in the books of account, stock records, sales and purchases made by the assessee.

7. That the assessing officer in rejecting the books of account, has erred in law and on facts in not appreciating that GP rate of assessee company, from manufacturing activity, increased from 14.56% in the immediately preceding previous year to 18.03% in the previous year relevant to assessment year under appeal.

8. That the AO, in rejecting books of account, has erred in law and on facts in not appreciating that the Trade Tax authorities have accepted the books of account, production, sale, purchase of the assessee company for the year under appeal.

9. That the AO has erred in law and on facts in not reducing from the amount of gross profit, earned on trading activities, indirect expenses incurred in such trading activities while computing deduction u/s 80B.

10. That the assessment order is contrary to facts, law and principles of nature justice."

3. None appeared on behalf of the assessee on the appointed date of hearing in spite of notice and hence, we proceed to decide this appeal of the assessee ex-parte qua the assessee.

3 4. Learned D.R. of the Revenue supported the orders of the authorities below.

5. We have considered the submissions of Learned D.R. of the Revenue, perused the material available on record and gone through the orders of the authorities below. We find that none appeared on behalf of the assessee before the CIT(A) also in spite of several opportunities granted by him and therefore, CIT(A) was also compelled to pass ex-parte order. The issue was decided by CIT(A) as per Para 3 of his order, which is reproduced below for the sake of ready reference:-

"3. The assessee is engaged in manufacturing and sale of cycle and exhaust fans spare parts and has filed its return of income on 18/11/2003, declaring income of Rs.2,78,080/- on total turnover of Rs.31.83 crores. The AO has made addition of Rs.2,83,451/- on account of suppressed sale, Rs.35,888/- out of car expenses and Rs.10,000/- out of telephone expenses. The contents of the assessment order are perused and found correct. The books of accounts are rejected u/s.145(3) and thereby the AO has computed the additions. During the appeal proceedings also, the details and evidences in support of the grounds of appeal are not filed, Accordingly, the additions made by the AO are hereby confirmed."

6. In the above Para of the order of learned CIT(A), we find that it is noted by him that the books were rejected by Assessing Officer u/s 145(3) of the Act. He has also given a finding that the additions were made by the Assessing Officer on account of suppressed sale of Rs.2,83,451/-, out of car expenses of Rs.35,888/- and out of telephone expenses of Rs.10,000/-. We also find that the Assessing Officer asked the assessee to produce log book in respect of user of vehicles and details regarding telephone expenses, which were not produced before him and therefore, some estimated disallowance was made by him on the basis that this much expenditure was not for business purposes. Regarding the addition made by the Assessing 4

Officer by estimating the sale proceeds, it is noted by CIT(A) that the assessee has reported higher generation of scrap to the extent of 12.50% as against 9.62% in assessment year 2001-02 and 2002-03. The Assessing Officer has worked out the average generation of scrap at 10.92% and held that the excess generation of scrap reported by the assessee to the extent of 1.20% is suppression of sales. Since no evidence has been produced by the assessee before CIT(A) or before us to controvert this finding of the Assessing Officer, we do not find any reason to interfere in the order of CIT(A) on any of the issues.

7. In the result, the appeal of the assessee stands dismissed.

(Order was pronounced in the open court on the date mentioned on the caption page)

Sd/. Sd/.

(SUNIL KUMAR YADAV) ( A. K. GARODIA ) Judicial Member Accountant Member

Dated:10/03/2015 *C.L.Singh

Copy of the order forwarded to : 1.The Appellant 2.The Respondent. 3.Concerned CIT 4.The CIT(A) 5.D.R., I.T.A.T., Lucknow Asstt. Registrar