TMI Blog2019 (4) TMI 1815X X X X Extracts X X X X X X X X Extracts X X X X ..... er year but he increased it to ₹ 11,500/- per bigha in this year without any basis, whereas as per the assessee's working it comes to ₹ 7074/- per bigha. When the assessee's cost on hired land is much less than the estimation resorted by the A.O., then in order to establish how the cost of agricultural proceeds on self owned land could be double, the Assessing officer should have brought some scientific or practical findings on record, which he failed to do. By resorting to this entire hypothetical averaging, he has aimed to reduce the agricultural receipts by an amount of ₹ 1, 76,330/ -, which constitutes around 7% of the total agricultural receipts shown by the assessee. Whole working of the A.O. is found to be neither backed by any enquiries, nor any basis which is sustainable. The addition by way of reduction in the claim of agricultural income without holding any expenses as false is held to be unjustified and directed to be deleted Addition u/s 68 on account of unexplained cash deposits - HELD THAT:- CIT-A has given a specific finding that cash deposit receipts are matching from the bank book ledger accounts, we find that the source of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(3) dated 31.03.2015 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same may kindly be quashed. 2. ₹ 13,55,000/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in sustain the addition of ₹ 13,55,000/- on account of cash deposit in Axis Bank, Kota. Hence the addition so made by the AO and partly confirmed by the ld. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the addition may kindly be deleted in full. 3. The ld. AO erred in law as well as on the facts of the case in charging of interest u/s 234B, 234C 234D as consequential in nature. The appellant totally denies it liability of charging of any such interest. Hence the interest so charged, being contrary to the provisions of law and facts, may kindly be deleted in full. 2. Briefly the facts of the case are that the assessee is a sole proprietor of M/s Raj Shree Goods Transport Corporation. He filed his return of income declaring business income of ₹ 9,98,716/- which was taken up for scrutiny by the Assessing officer. The books of accounts of the assessee were rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h complete justification of above expenses, whether expenses incurred by you wholly and exclusively for the business purpoes as per Section 37 however, the assessee has failed to produce the vouchers against various expenditure claimed in the Profit and loss account. The Assessing Officer accordingly held that the books of accounts maintained by the assessee are not open for verification and therefore the real profit cannot be ascertained and therefore invoked the provisions of Section 145(3) of the IT Act and thereafter has estimated the net profit @ 5% as against 2.39% declared by the assessee which has resulted in trading addition of ₹ 848,795/- to the returned income. 5. Being aggrieved the assessee carried the matter in appeal before the ld. CIT(A) who has held that the AO s reasons for rejection of books of accounts are not justifiable for various reasons. As per the ld. CIT(A), the AO has not doubted the nature of receipt as such in the bank account and enhancing only the GP rate while passing the order, it is clear that he was only dissatisfied with the profit element. Further, the AO has not been able to highlight how the maintenance of record was adversely diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.78% 2012-13 3,25,81,686/- 7,80,289/- 2.39% It was further submitted by the ld AR that the assessee has declared NP rate of 2.39% which is better than the average NP rate of last 5 years which come to 1.71%. It was submitted that the Hon ble Rajasthan High Court has also held that for estimation of NP rate, past history of the assessee of last 5 years may be taken as a reasonable basis for estimation and in this regard our reference was drawn to the decision of Hon ble Rajasthan High Court in case of Shri Kishan Kumar Saraiwala vs. CIT (DBIT No. 325 and 338/2011 dated 29.08.2017). It was further submitted that even where the books of accounts are rejected, mere rejection of books of accounts need not necessarily lead to additions to the returned income and in support reliance was placed on the Hon ble Rajasthan High Court in case of CIT vs. Gotan Lime Khaniz Udyog 256 ITR 243. It was submitted that in such cases, in view of better results declared by the assessee based on assessee s past history, no trading addition can be made in the hands of the assessee. 8. We have heard the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mated the cost on sale proceeds to be less is also not clear since as per the A.O's own working, the rate estimated was ₹ 10,000/- per bigha in the earlier year but he increased it to ₹ 11,500/- per bigha in this year without any basis, whereas as per the assessee's working it comes to ₹ 7074/- per bigha. When the assessee's cost on hired land is much less than the estimation resorted by the A.O., then in order to establish how the cost of agricultural proceeds on self owned land could be double, the Assessing officer should have brought some scientific or practical findings on record, which he failed to do. By resorting to this entire hypothetical averaging, he has aimed to reduce the agricultural receipts by an amount of ₹ 1, 76,330/ -, which constitutes around 7% of the total agricultural receipts shown by the assessee. In the entirely of facts, the whole working of the A.O. is found to be neither backed by any enquiries, nor any basis which is sustainable. The addition by way of reduction in the claim of agricultural income without holding any expenses as false is held to be unjustified and directed to be deleted. This ground of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments produced in the course of assessment proceedings as seen from the case records though the very basis of the scrutiny was cash deposits in the bank accounts. It is seen from the assessment record that as per the return filed by the assessee, in the Balance Sheet itself, 10 bank accounts are reflected out of which except for Axis Bank, Kota, all the other banks listed in A.O. s order, are also appearing. Thus, substantial information is on record with the A.O. all he needed to do was to carry out independent enquiries on the bank accounts, which though he initiated, but apparently he did not take to logical conclusion. 4) The ledgers filed with the submissions shows that there are substantial cash entries. On a perusal of the assessee s letter dated 30/03/2015 also he has clarified deposit to an extent of ₹ 62,43,800/- while not knowing the details of two other bank accounts because these account numbers were wrongly mentioned by the A.O. Thus while an amount of ₹ 55,78,970/- out of agricultural operations was received in cash which remains uncontroverted by the A.O. as well, the balance amount of ₹ 55,05,530/- which constitutes 1/6th of the rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account with Axis Bank, Kota in his return and he has also not been able to reconcile the cash deposit of ₹ 13,55,000/- in that account even during the appellate proceedings. He has cursorily mentioned in the reply dated 12/01/2017 that the details of such deposits were not traceable at their end. Thus, it is clear that the assessee has been unable to explain the source of this amount of ₹ 13,55,000/- made in Axis Bank, Kota. This amount is thus treated as unexplained cash deposit u/s 68 and addition to this extent only is liable to be confirmed out of the total addition of ₹ 1,08,08,800/-. The balance addition of ₹ 94,53,800/- is directed to be deleted. This ground of appeal is partly allowed. 13. Both the parties were heard and material available on record gone through and we find that similar issue was involved in the earlier assessment year 2011-12 wherein the Coordinate Bench (vide its order in ITA No. 470/JP/2015 dated 8.11.2017) has similarly deleted the addition made U/s 68 of the Act where the receipt from the transportation business and agriculture produce far exceeds the quantum of deposits in the bank accounts. Following the same and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
