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2019 (10) TMI 132 - ITAT INDOREValidity of reassessment - enquiry conducted by the DDIT (Inv.)-2, Indore - HELD THAT:- From the report, it is found that there are high volume of cash transactions in cash credit account done in the account maintained by the assessee at Khargaon branch. It is further observed by the A.O. that in the statement partner of the assessee firm Shri Nilesh Gandhi stated that the cash was drawn for payment to farmers from whom cotton was to be purchased and when cotton was not available in the market or the payment could not be made to the farmers, the same withdrawn cash was deposited back in the bank account. As further observed that in few cases, assessee firm had neither made payment to farmers on the day of actual purchase of cotton, which is mandatory as per Krish Upaj Mandi Act nor made additional payment @ 1% per day of the agricultural produce payable to the seller between the period of purchase and actual payment. As further observed that Shri Nilesh Gandhi during the statement admitted that cash is paid to the farmers on the same day or within 3 to 4 days but within a maximum time limit of 15 days. He stated that no interest as such was paid to the farmers for delayed payment. A.O. observed that the total turnover reflected in the books of accounts during the year under consideration is ₹ 71,73,13,479/- and in the judgement of ITAT in the case of Shri Amar Agrawal [2013 (7) TMI 1139 - ITAT INDORE] , net profit was determined at 5% of total turnover. A.O. was of the view applying the same rate of net profit, excess income of ₹ 1,98,92,774/- has been escaped assessment. Now it is to be determined whether the assessment has been rightly reopened or not. There is no dispute with regard to the fact that there was no other material before the A.O. except the report of the DDIT (Inv.) and observation made therein. Another fact that compelled the A.O. was decision of this Tribunal rendered in the case of Amar Agrawal [2013 (7) TMI 1139 - ITAT INDORE] . CIT(A) has decided this issue in favour of the assessee by holding that the A.O. failed to bring any fresh evidence for information regarding escapement of income. We do not find any fault in this finding of the CIT(A) as admittedly, in original proceedings, the A.O. has examined this issue. Moreover, the reopening is after lapse of four years as law is now well settled whether assessment is reopened after a lapse of four years from the end of the relevant assessment year, this can only be done, if it is brought on record that there is failure on the part of the assessee to disclose fully and truly all material facts. There is nothing on record suggesting that the assessee failed to disclose fully and truly material facts. Therefore, we affirm the view of the CIT(A) on this issue. This ground of the revenue’s appeal is dismissed.
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