TMI Blog2013 (6) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... rately again would amount to taxing the same amount twice. No infirmity in the order of the CIT (A) in deleting to the addition made on account of gross profit discrepancy or on account of excess stock. In favour of assessee. Unexplained deposits in the bank account - CIT(A) deleted the addition - Held that:- As it is seen from the confirmation letter forming part of the order of the CIT (A) that the creditor is an income-tax assessee and all the details with regard to the advancement of amount of Rs.20 lakhs has been mentioned in the confirmation letter. The said confirmation letter not only establishes the identity of the creditor but also proves the genuineness of the transaction by giving the details of cheque Number, bank accounts etc., through which the transaction was made. It is also a fact that the amount of Rs.20 lakhs was also repaid by the assessee through cheque. Therefore there being no doubt with regard to creditworthiness, the creditor being an Income-tax assessee, there is no infirmity in the order of the CIT (A) in deleting the addition. In favour of assessee. - ITA No. 529/Hyd/2010, ITA No.530/Hyd/2010, ITA No.531/Hyd/2010 - - - Dated:- 17-6-2013 - Shri Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red Rs.12 lakhs under regular sales on account of 'excess stock under survey' and admitted net profit at Rs.2,77,122/-. The Assessing Officer further noted that the declared stock of Rs.12 lakhs if is excluded for the purpose of gross profit earned, it works out to 2.41% which is very low in assessee's line of business. He therefore issued a letter to the assessee proposing to adopt the gross profit at the average rate of 17.04% on the basis of gross profit earned by the assessee during the preceding three assessment years and quantified the addition for the assessment year under dispute is at Rs.9,16,281/-. The assessee in her reply submitted that since the gross profit declared by her for the assessment year under dispute is comparable to gross profit declared in the earlier assessment years, no addition should be made. The Assessing Officer however did not accept the contention of the assessee and added an amount of Rs.9,16,281/- on account of difference in gross profit. Further, the Assessing Officer observing that the excess stock found during the course of survey was only on account of unaccounted purchase of goods made of Rs.11,98,865/- which was also added to the income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the sales to purchase ratios for the three years, it is found that for the AY 2004-05, the ratio was 1.24, for the AY 2005-06, the ratio was1.27 while for the AY 2006-07, the ratio is 1.23. There is no inconsistency in these figures. 6.6 From the above discussions, it is clear that there is no obvious discrepancy in the results which points to earning of any unaccounted income. In any case, it is well settled law that if the accounts of an assessee do not provide an accurate picture of its financial affairs, the Assessing Officer is well within his rights to reject the books of account and estimate the profits. In the present case, the Assessing Officer has not pointed out any defect in the books of account which would prevent him from calculating accurately the income of the appellant. Therefore, there is no basis for rejecting the books. In fact, the Assessing Officer has not rejected the books. Further, the Assessing Officer has not pointed out any single fact to show that the appellant has been earning unaccounted income, which is not reflected in the books of account. The unaccounted stocks found during the course of survey have been admitted by the appellant and incorpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer to the effect that the gross profit declared by the assessee is very low is without any substance. It would be evident from the comparable chart given in a tabular form which is incorporated in para-2 of the assessment order, the gross profit shown in the impugned assessment year is comparable to the gross profit shown for the preceding two assessment years. It is also a fact that the assessee has incorporated the excess stock found at the time of survey in the books of accounts and has declared profit thereon. Therefore, consideration of the excess stock found separately again would amount to taxing the same amount twice. In aforesaid view of the matter, we do not find any infirmity in the order of the CIT (A) in deleting to the addition made on account of gross profit discrepancy of Rs.9,16,281/- or on account of excess stock of Rs.11.98,865/-.. In view of the above, we confirm the order of the CIT (A). Hence the grounds raised by the department are dismissed. 8. In the result, appeal filed by the department stands dismissed. ITA No.531/Hyd/2010- Mohammed Farhan:- 9. Since facts are identical and grounds raised in this appeal are similar to ITA No.529/H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee has been established with his PAN and also the details of transactions also has been furnished. He therefore deleted the addition by observing as under:- "From the above, I find that the creditor has been properly identified. His permanent account Number has been given and the details of the cheques vide which the transaction took place has also been provided. Details of the bank and bank account have also been provided. Further, all the transactions duly appeared in the books of account of the appellant as well as the creditor. Copies of the relevant accounts in the books of M/s Maphar Constructions certified by the creditor have also been provided. From the above, it is amply clear that the appellant had discharged his onus by identifying the creditor and providing all details regarding the transaction, including the business of the creditor and his Permanent Account Number. There is, therefore, no doubt about the discharge of onus by the appellant and about the genuineness of the transaction. Accordingly, I find that the addition of Rs.20 lakhs made on account of unsubstantiated credits has not been correctly made and should be deleted. The Assessing Officer i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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