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2018 (4) TMI 607 - AT - Income TaxAddition on account of excess cash found during the course of survey - Held that:- Section 133A does not empower any Income tax authority to examine any person on oath and then use it as evidence to make addition. In such a situation, no addition can be made or sustained only on the basis of the statement recorded during the survey U/s 133A of the Act. Once the assessee has retracted from the statement then it was on the A.O. to establish beyond any doubt the issues on which the addition has been made. Once the assessee has submitted up to date cash book and stock register then it was duty of the Assessing Officer to pin point the defects in such books of account particularly with regard to the issues, on which the statement was recorded during the survey. Further in the case of Shri Pawan Kumar, even the Assessing Officer recorded his statement but he has not asked any question with regard to amount of advance of ₹ 10.00 lacs for which the addition has been made only on the basis of a piece of paper, which was not signed by Shri Pawan Kumar. Similarly in the case of debtors, once the assessee has retracted then it was the duty of the Assessing Officer to examine these debtors to establish the truthfulness of the debt. - Decided in favour of assessee Invoking the provisions of Section 145(3) - estimating the turnover and G.P. - Held that:- The assessee himself admitted that part of the sales/purchases are being made in unaccounted manner. As regards estimation of profit, after invoking the provisions of sec. 145(3) of IT Act, it may be stated that it is a settled law that even after invoking the provisions of sec. 145(3), the AO is not empowered to assess the income at whatever figures he wants and the AO is supposed to make an honest estimation either based on the past history of the appellant’s own case or on the basis of any comparable case - in the immediate preceding year the appellant has shown G.P. rate of 13.24%. Therefore it will be fair and reasonable to apply G.P. rate of 13.24% on estimated sales of ₹ 1800000/- and accordingly the gross profit is arrived at 2383200/- as against G.P. rate shown by the assessee for ₹ 2240422/-. Accordingly trading addition of ₹ 142778/- is made. The appellant gets relief of ₹ 316800/-. - no merits in the pleadings of the assessee
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