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2015 (5) TMI 846 - ITAT DELHI

2015 (5) TMI 846 - ITAT DELHI - TMI - Rejection of books of accounts - AO applying the net profit rate of 1.25% - Held that:- It is an admitted fact that the AO had not pointed out any specific defect in the books of accounts maintained by the assessee in the regular course of business. It is also not brought on record that there was a difference in the sales declared by the assessee in its books of accounts vis-à-vis accepted by the Sales Tax Authority. In the present case, the AO while applyin .....

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by the assessee for the year under consideration was not comparable with the profit rate declared for subsequent years which had been accepted by the ITAT. In that view of the matter we are of the view that the ld. CIT(A) rightly deleted the addition made by the AO.

As regards, to the another addition of ₹ 3,10,000/- in respect of difference between the amount shown in the cash receipts issued by the assessee to M/s Krishna Store and the amount entered in assessee’s cash book i .....

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ctive bills which confirmed that the correct amounts involved in the two transactions were entered in the primary books of accounts i.e. cash book & ledger. We, therefore, do not see any infirmity in the order of the ld. CIT(A) on this issue. - Decided against revenue.

Penalty u/s 271(1)(c) - held that:- As have upheld the order of the ld. CIT(A) in deleting the quantum addition. The said additions were the only basis for levying the penalty u/s 271(1)(c) of the Act and as the additio .....

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le High Court while deciding the appeals of the department in ITA Nos. 319/2006 and 324/2006 vide order dated 29.07.2008 directed the Tribunal to compute the appropriate rate of profit in respect of turnover of ₹ 3,99,97,585/- which had already been computed by the AO. The relevant findings have been given in paras 3 & 4 of the order date 29.07.2008 which read as under: 3. On the aspect of quantum, none of the other findings of the tribunal require any interference and only the issue o .....

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gard to penalty to the tribunal. Consequently, both the appeals are disposed of with the direction that the tribunal shall have a relook into the rate of profit to be applied and shall pass an order on that aspect alone based on the material before it. All the other findings with regard to the quantum appeal are to be retained. The tribunal, after returning a finding on the rate of profit, would consider the revenue s appeal with regard to penalty and pass appropriate orders thereon. With these .....

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d providing accommodation entries, merely relying in the decision of ITAT for the A.Ys. 1990-91 and 1991-92. The decision for the A.Y. 1990- 91 and A.Y. 1991-92 is itself erroneous as ITAT had not decided the case for A.Y. 1989-90 but merely set aside and for which the department is filing appeal u/s 254(2). 2. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the addition of ₹ 3,10,000/- in respect of difference between the amount shown in the cash re .....

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e assessee had shown sale of dry fruits to the tune of ₹ 4,70,21,476/-. Out of which sale of ₹ 4,70,04,650/- was made in cash to three parties namely, M/s Krishna Stores, M/s Pilco Systems and M/s Satish Sales Agencies. The AO conducted the enquiry and found that the aforesaid parties were not traceable at the given address. The AO also observed that the proceeds of cash sales had been deposited in the bank account of the assessee immediately before issuing account payee cheques of m .....

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chase or sales and that the cash deposited in the bank account of the assessee represented the unaccounted money of suppliers who had concerted the same into accounted money with the help of the assessee by first depositing the cash in his account and then getting back the money through account payee cheques as sale proceeds of their goods. The AO pointed out that a search and seizure operation was conducted in this case on 29.11.1988. The AO mentioned certain discrepancies in para 4 of the asse .....

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counted money by them. The AO noted that the assessee had received total cash of ₹ 3,99,97,585/- which has been deposited in his bank account in lieu of which cheques had been issued to the suppliers. The AO invoked the provision of section 145 of the Act and rejected the books of accounts, he estimated the income @ 1.25% on the deposit of ₹ 3,99,97,585/- which was worked out of ₹ 4,99,969/-. The AO also noted that the cash receipts seized and inventories at Annexure-A-5 page 6 .....

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ny explanation, the said amount was added to the income of the assessee. 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that in the succeeding assessment years similar additions were made by the AO which had been deleted by the than CIT(A) vide order dated 03.03.1994 and subsequently by the ITAT vide order dated 12.10.2001 for the assessment year 1998-99 and order dated 14.09.2001 for the assessment year 1991-92. 5. The ld. CIT(A) after considering the submiss .....

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ed in the receipt book due to clerical mistake which was verifiable from the record. It was further submitted that the figures shown in the primary books of accounts i.e. the cash book and ledger were correct and that the assessee s bank statement also clearly shows that the correct amounts received from the buyer M/s Krishna Stores were at ₹ 40,000/- and ₹ 5,50,000/- which had been duly deposited in the bank account. It was further submitted that the assessee as well as M/s Krishna .....

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correct amounts which were involved in the two transactions. The ld. CIT(A) after considering the submissions of the assessee observed that the assessee had sufficiently proved that the amounts in respect of the two transactions were wrongly entered in the receipt book and that the correct figures were incorporated in the more reliable primary books of accounts i.e. the cash book and ledger. He further observed that the very sums shown in the primary book were, in fact, deposited in the bank ac .....

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ubmissions made before the authorities below and further submitted that the turnover of the assessee has been accepted by the AO and in the subsequent year similar type of addition made by the AO was deleted by the ld. CIT(A) and later on, the ITAT confirmed the action of the ld. CIT(A) while deciding the appeal the department vide order dated 12.10.2001 and 14.09.2001 for the assessment years 1990-91 and 1991-92 respectively (copies of the said orders were furnished which are placed at page nos .....

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he AO had not pointed out any specific defect in the books of accounts maintained by the assessee in the regular course of business. It is also not brought on record that there was a difference in the sales declared by the assessee in its books of accounts vis-à-vis accepted by the Sales Tax Authority. In the present case, the AO while applying the net profit rate of 1.25% had not pointed out any specific case wherein similar net profit rate has been shown by any comparable case. It is al .....

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ality of the facts and are of the view that the profit declared by the assessee on the turnover of ₹ 3,99,97,585/- does not require any modification on our part. As regards to the addition on account of application of net profit rate, in the present case, it is not brought on record that the profit declared by the assessee for the year under consideration was not comparable with the profit rate declared for subsequent years which had been accepted by the ITAT. In that view of the matter we .....

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