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2014 (3) TMI 1213 - AT - Income TaxRejection of books of account - trading addition by estimation on net profit of contract business - HELD THAT:- We find that books of account of the assessee are defective for the reasons mentioned in the order of the AO and the learned CIT(A) and no cogent explanation in this regard has been brought on record and, therefore, we find no infirmity in the order of learned CIT(A) who has rightly confirmed the action of the AO for invoking the provisions of s. 145(3) Estimation of NP no comparable case was given by AO and learned CIT(A). Further, we find force in the contention of the learned Authorised Representative that this year was the second year of the assessee in contract business. However, in current year the contract receipts of the assessee have increased by more than 6 times from last year. The NP rate is also better that last year, therefore, in view of the decision of Gotan Lime Khaniz Udhog [2001 (7) TMI 19 - RAJASTHAN HIGH COURT] even if the provisions of s. 145(3) are invoked, in the present circumstances and facts of the case, no addition is called for. AO is not justified in making any addition on this account and addition confirmed by learned CIT(A) is directed to be deleted. Thus, ground No. 1 of the assessee is dismissed and ground No. 2 of the assessee is allowed. Undisclosed investment in the plot purchased in the name of partnership firm - Addition on account of sharing of assessee in total alleged on-money payment paid by firm for purchase of Plot in which the assessee was partner - HELD THAT:- We find that the Department has carried out search over the assessee and no incriminating document was found to show undisclosed investment by the assessee in the purchase of the plot in the name of partnership firm Kamakshi International. We find that the addition was made/sustained in the hands of this assessee merely on surmises, conjectures, probabilities and possibilities without bringing any positive evidence. As admitted fact that the plot was purchased in the name of partnership firm Kamakshi International who is a separate assessee of IT Act through the registered sale deed. The sale consideration shown in the registered sate deed is Rs. 1,20,00,000, and the assessee's contribution in the capital of the firm was only Rs. 60.000. Had the investment in plot was in profit-sharing ratio then the investment of the assessee should be Rs. 12,00,000. It means that the other partners have mainly contributed the source of the investment in the plot. Further, the onus under s. 69B is on the Department to prove the investment. AO has not brought any positive material to show that the assessee has made undisclosed investment in the plot purchased in the name of partnership firm - Decided in favour of assessee. Addition u/s 69B - interest thereon on account of alleged unaccounted/undisclosed investment from the hands of the assessee - HELD THAT:- We find that the AO has not brought any positive material to show that the assessee has made investment in loans through Shri Manish Tambi. The AO has not provided the copy of seized material to the assessee and effective opportunity of confrontation was not given to the assessee. The inquiries or material if any was gathered behind the back of the assessee, the same cannot be used against the assessee without providing opportunity of confrontation to the assessee. If the AO proposes to act on such material as he might have gathered as a result of his private enquiries behind the back of the assessee, he must disclose the substance of all such material to the assessee and if this is not done, the principles of natural justice stand violated. Onus under s. 69B of IT Act is on Department to prove the investment has been made by the assessee, which was not discharged by the AO. Nor any positive material was brought ort records to show that the assessee has made cash loans to the ultimate borrowers through Shri Manish Tambi. Therefore,no addition is called for in the hands of this assessee.
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