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ACIT Circle-14(1) Room No. 415, 4th Floor, C.R. Building, I.P. Estate, New Delhi. Vs. Paramount Impex Pvt. Ltd. Samreedi, C-8/8834, Vasant Kunj, New Delhi.
July, 13th 2015
                         DELHI BENCHES : "F" NEW DELHI


                                   ITA No : 866/Del/2011
                                       AY : - 2006-07

           ACIT                 vs.              Paramount Impex Pvt. Ltd.
           Circle-14(1)                          Samreedi, C-8/8834,
           Room No. 415,                         Vasant Kunj,
           4th Floor, C.R. Building,             New Delhi.
           I.P. Estate, New Delhi.
                                                 (PAN AAACP7279B)
                (Appellant)                            (Respondent)

                                       CO No : 92/Del/2011
                                         AY : - 2006-07

            Paramount Impex Pvt. Ltd. vs.        ACIT
            Samreedi, C-8/8834,                  Circle-14(1),
            Vasant Kunj,                         Room No. 415,
             New Delhi                           4th Floor, C.R. Building,
                                                  I.P. Estate, New Delhi.
           (PAN AAACP7279B)
                  (Appellant)                                   (Respondent)

                       Appellant by  : Shri Vikram Sahay, Sr. DR
                       Respondent by :None
                     Date of Hearing  :08.7.2015
               Date of pronouncement : 10.7.2015


    This is an appeal filed by the revenue directed against the order of the CIT(A)

XVII dated 15.11.2010 for the asstt. year 2006-07 on the following grounds :-

      1.     "That on the facts and circumstances of the case and in law the Ld CIT(A) has
             erred in deleting the disallowances of Rs. 8,43,567/- out of payment to
             employees, Rs. 8,79,987/- out of office and selling expenses, Rs.87,07,Q2Q/-
             out of commission paid and Rs.9,36,336/- out of finance charges {totalling to
             Rs.1,13,66,910/-} made by the AO on account of unverified expenses as the
                                                  ITA No.866/Del/2011 & CO No. 92/Del/2011
                                                   ACIT vs. M/s. Paramount Impex Pvt. Ltd.

               assessee in spite of opportunity given, failed to produce bills and vouchers
               and other evidence in support of the expenses claimed.

      2.       That the appellant craves to be allowed to add any fresh grounds of appeal
               and or/deleted or amend any other grounds of appeal".

2.      None appeared on behalf of the assesee despite the issuance of notice.

There is no request for adjournment. Under these circumstances we dispose of

these cases, ex parte, qua the assesee after hearing the Ld. DR.

3.         Heard the Ld. DR Shri Vikram Sahay. The sole ground on which the revenue

is in appeal is against the deletion by the Ld. CIT(A) of certain disallowances made

by the AO in an order passed u/s 144 of the Act on 15.12.2008. The AO in this case

passed an ex parte order on the ground that the assessee has failed to produce

books of accounts, bills and vouchers for various expenses. Adhoc disallowances @

10% of expenditure claimed was made. The first appellate authority had called for a

remand report from the AO on the submissions made by the assessee. As the AO

had not addressed the submissions of the assessee in his remand report               dated

9.7.2010. The Ld. CIT(A) gave yet another opportunity to the AO to meet the

submission of the assessee. Thereafter at para 4.1 he held as follows :-

      "4.1 I have carefully considered the submissions of Ld. AR and perused the
      order passed by the AO, remand report of the AO and rejoinder of the Ld. AR
      to the remand report. It is seen that in the remand proceedings, the appellant
      has furnished before the AO, the complete details of expenses. Unlike the GP
      rate addition, in the case of above expenses, the appellant has discharged its
      primary onus of furnishing the necessary details and printout of ledger
      accounts relating to expenses. The AO has not disputed the furnishing of
      these details and the same has been admitted by him in his remand report.
      The AO has not pointed out any discrepancy in the details submitted by the
      appellant. Accordingly, there is no reason for me to sustain the disallowances
      of expenses made by the AO. Hence, the disallowances of above expenses
      made by the AO are deleted. These grounds of appeal are allowed."

                                                  ITA No.866/Del/2011 & CO No. 92/Del/2011
                                                   ACIT vs. M/s. Paramount Impex Pvt. Ltd.

4.    When this finding is read with the finding of the CIT(A) at para 3.4 of his order,

where he had upheld the action of the AO in estimating the gross profit of the

assessee, we find no justification in the revenue seeking separate disallowance on

adhoc basis of various expenses claimed. When an addition is made on the basis of

gross profit rate, separate disallowances of expenses are not warranted.

5.    In the result appeal of the revenue is dismissed.

6.    Coming to the cross objection, we find no infirmity in the order of the first

appellate authority, where at para 3.4 he has upheld the action of the AO, for the

reason that the assessee failed to discharge its primary onus that lay on it. Despite

repeated opportunities, the assessee failed to produce books of accounts and

supporting bills, vouchers of sales, purchases, stock details etc. Hence the books

were rejected and the gross profit estimated. Hence we dismiss the CO filed by the


7.    In the result the revenue appeal as well as the cross objection are dismissed.

          Order pronounced in the open court on     10th       July, 2015.

             sd/-                                      sd/-
           (G.C. GUPTA)                            (J. SUDHAKAR REDDY)
          VICE PRESIDENT                          ACCOUNTANT MEMBER
Dated: the 10th July, 2015

Copy of the Order forwarded to:

1.    Appellant
2.    Respondent
3.    CIT
4.    CIT(A)
5.    DR
6.    Guard File                         By order

                                                   ITA No.866/Del/2011 & CO No. 92/Del/2011
                                                    ACIT vs. M/s. Paramount Impex Pvt. Ltd.

                                                     Dy. Registrar

Sl.                    Description                    Date

1.    Date of dictation by the Author               8.7.2015

2.    Draft placed before the Dictating Member      9.7.2015

3.    Draft placed before the Second Member

4.    Draft approved by the Second Member

5.    Date of approved order comes to the Sr. PS

6.    Date of pronouncement of order

7.    Date of file sent to the Bench Clerk

8.    Date on which file goes to the Head Clerk

9.    Date of dispatch of order

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