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Income Tax Officer, Ward 5 (2) , Surat Versus Shiv Prakash U. Rathi (HUF)

2015 (12) TMI 1412 - ITAT AHMEDABAD

Addition on account of low GP - CIT(A) deleted the addition of Gross profit at 10% of total turnover made by the Assessing Officer - Held that:- Decided in favour of the assessee by decision of a coordinate bench, in the group cases of ITO vs. S. N. Rathi & Others [2015 (12) TMI 766 - ITAT AHMEDABAD] Assessing Officer did not point out any comparable cases or any special material which has an influence for giving rise to such a profit. The other discussion made by Assessing Officer in assessment .....

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years are rejected. The Ld. Assessing Officer shall compute the profit from the benami bank accounts @ 2.45% of the turnover - Decided against revenue.

Addition on account of cash credit - CIT(A) deleted the addition - Held that:- In the absence of any infirmities having been pointed out in the reasoning adopted by the ld. CIT(A), we see no reasons to disturb the conclusions arrived at in respect of addition for unexplained credits of ₹ 3,00,000/- and ₹ 2,00,000/- having b .....

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on 143(3) of the Income Tax Act, 1961 ( the Act hereinafter), for the Assessment Year 2004-05, on the following grounds :- 1. On the facts and in the circumstances of the case and in Law, the Ld. CIT(A)-III, Surat has erred in deleting the addition of Gross profit of ₹ 6,79,613/- at 10% of total turnover of ₹ 1,37,82,299/- made by the Assessing Officer. 2. On the facts and in the circumstances of the case and in Law, the Ld. CIT(A)-III, Surat has erred in deleting the addition on acc .....

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t January, 2006. As the assessee was unable to produce the books of account, which were stated to have been destroyed in the floods, the gross profit was estimated @ 10% - as against 5.07% claimed by the assessee. The Assessing Officer further noted that while the books of accounts of the assessee show deposit of ₹ 3,00,000/- from Gitadevi R. Rathi and payment of interest of ₹ 3,115/- on the same, but the assessee has not been able to discharge obligation of proving genuineness of th .....

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g as follows :- The next ground of appeal is regarding addition on account of low GP. The AO observed that the GP shown by the appellant was 5.07% and considered it to be low on the ground that compared to GP in the case of a sister concern. He, therefore, adopted a GP rate of 10% and made an addition of ₹ 6,79,613/-. I am at a loss to understand the logic behind such an addition. The AO has nowhere mentioned even the name of the sister concern and has never given the appellant an opportun .....

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nterest thereon and addition to capital of ₹ 2,00,000/-. During the course of appellate proceedings, the ld. AR submitted that the confirmation of the depositors along with name, address and PAN were submitted to the AO during the course of assessment proceedings. The ld. AR filed copies of the same before me also. Further, regarding addition to capital, it was submitted that complete confirmations and source was filed before the AO. Copies of the same have been filed before me also. After .....

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aterial on record and duly considered facts of the case in the light of the applicable legal position. 5. So far as first ground of appeal is concerned, as learned Representatives fairly agree, the issue is now covered, on merits, in favour of the assessee by decision of a coordinate bench, in the group cases of ITO vs. S. N. Rathi & Others (order dated 29.05.2015), wherein the co-ordinate bench has inter alia, observed as follows :- 23. As observed earlier, whenever an adjudicator used to e .....

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at 10% in the finding (extracted supra), no reasons are discernable. The Assessing Officer was of the view that expenses must have been debited by the assessee in his regular books of accounts. In other words, the assessee has been doing business in his name for which regular books of accounts are being maintained and income has been offered, accounts are audited. Thus, Assessing Officer formed an opinion that expenses relatable to benami transaction must have been debited by the assessee in th .....

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nami transaction. Therefore, Assessing Officer was not justified in applying GP directly on turn-over for working of the income of assessee. The ld. Assessing Officer has not referred the case of any similarly situated assessee who ought to shown the profit at 10% without debiting the expenditure in this line of the business. The Ld. First Appellate Authority on the other hand has observed that special auditor was appointed by the Assessing Officer to work out the profit embedded in these benami .....

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soning assigned by the Ld. First Appellate Authority vis-à-vis that of Assessing Officer in the findings extracted above, then scale would tilt in favour of Ld. First Appellate Authority, because Ld. First Appellate Authority has made reference to the comparable cases as well as the opinion of special auditor. On the other hand, Ld. Assessing Officer did not point out any comparable cases or any special material which has an influence for giving rise to such a profit. The other discussion .....

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