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2022 (12) TMI 253 - ITAT MUMBAIUnexplained cash credits u/s 68 - assessee had failed to furnish satisfactory explanation with regard to the identity of the parties, sources thereof, and genuineness of the transactions - CIT-A restricted addition to 0.15% - HELD THAT:- AO has taken note of the information received from the sales tax/DGIT(Inv.) as well as the statement of Shri Abhishek Morarka (director of assessee’s group of companies) to the sales tax department, wherein he admitted that the assessee company is also engaged as an entry operator for beneficiaries in lieu of commission (not into genuine purchase/sales of any goods/products). Based on this information and the infirmities pointed out elaborately (point wise) by AO at para 10 and relying on judicial precedents V Pinto & Co. [2005 (2) TMI 751 - ITAT BANGALORE] and the ratio of case law of Hon’ble Jurisdiction High Court in Ratanlal Omprakash [1981 (4) TMI 82 - ORISSA HIGH COURT] AO found fault with the accounts maintained by the assessee and held it to be incorrect and incomplete. And for the elaborate reason AO rejected the books of accounts for AY. 2011-12 which action has been confirmed by the CIT(A) cannot be faulted since we completely agree with the reasoning given by AO to have rejected the books. So no separate reasons of our own are not given (refer Hon’ble Supreme Court order in CIT Banglore Vs. K. Y. Pilliah and Sons [1966 (10) TMI 35 - SUPREME COURT]. Therefore, ground no. 1 of the assessee’s (CO) fails. Coming to the action of the CIT(A) restricting the commission at 0.15% of the sales rather than 1% of the total purchases we find the action to be a plausible view and so we uphold the same. Therefore, the ground no. 1 of the revenue fails and ground no. 2 of the assessee to further restrict the commission at 0.10% is rejected. Addition by estimating the commission earned @ 1% on purchase and sales of investment transaction made during the year by treating the said transaction as accommodation entry - HELD THAT:- CIT(A) noted that the assessee failed to prove the correctness of the transactions in the purchases and sale of shares. So he confirmed the action of AO. Before us even though the assessee has filed the CO, it has not been filed any material to take a different view other than the view taken by AO/Ld. CIT(A). Therefore, we uphold the action of the Ld. CIT(A) and dismiss this ground of appeal of the assessee’s CO. Disallowance of expenditure treated to the profit and loss account - books of the accounts has been rejected and the AO has resorted to estimate the income, [one percent of sales & purchases] - HELD THAT:- CIT(A) has dismissed this ground of appeal of the assessee because once the books of the accounts has been rejected and the AO has resorted to estimate the income, [one percent of sales & purchases] according to him, the AO has rightly not separately allowed the expenditure claimed in the P&L Account which impugned action of the Ld. CIT(A) is in consonance with settled position of law; and on the very same reasoning, we uphold the action of AO in not separately allowing this expenditure because he rejected the books and resorted to estimation of income; and therefore Ld CIT(A) rightly confirmed the AO’s action on this issue, which does not merit any interference from our side. So we uphold the impugned action of Ld. CIT(A) and therefore this ground of assessee is dismissed.
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