TMI Blog2016 (7) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer on the explanation advanced by the assessee before confirming the addition of ₹ 19,39,677/-. At the same time, we are not able to appreciate the conduct of the assessee whose intentions are malafide by furnishing unrealistic statement of accounts intended for different purposes and to gain undue advantage. We are further of the view that no purpose will be solved by remanding the case back to the file of the Assessing Officer because of the long lapse of time. Considering the facts and circumstances of the case and in the interest of justice, we are of the considered view that sustaining the addition by 50% of ₹ 19,39,677/- will suffice to meet the ends of justice. - Decided partly in favour of assessee Penalty under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are pertaining to quantum appeal penalty appeal, they are heard together and disposed of by this common order for the sake of convenience. ITA No.601/Mds/2013: 2. The assessee has raised several grounds in his appeal, however, the crux of the issue is as follows:- The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of ₹ 19,39,677/- made by the learned Assessing Officer on account of unexplained cash credit under section 68 of the Act. 3. Brief facts of the case are that the assessee is an individual engaged in the business of buying selling of automobile spare parts filed his return of income for the assessment year 2007-08 on 31.10.2007 admitting total income of ₹ 1,92,230 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to the result of the enquiry, the purchases and sales admitted in the accounts have not been disturbed by the Ld. AO. The facts of the transactions are as under: - The appellant has been negotiating for loan for the purpose of the business from the so called market financiers who will advance monies SANS security. The principle with interest is collected at equated daily installments at the end of each day through its collection agents. Before disbursement of the loan, these financiers make sure that, enough liquid cash with sufficient margin is available every day on the basis of cash sales as otherwise collection may suffer on some days. As is the practice, in order to show sufficient cash sales, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Sales tax and Income Tax Department. The fact that normal trading result is admitted in the accounts itself is enough proof that the gross profit is added to these sales also. The trading result of the appellant for the year is extracted hereunder:- Total sales as per Trading and P L Account -Rs.47,71,815/- Total cost of goods sold as per trading and P L Account -Rs, 41,00,098/- (Rs. 8,76,325 + ₹ 54,20,863-Rs. 21,97,090) Gross Profit 47,71,815 -Rs.6,71,716/- GP Percentage-6,71,716 x 100 14.08% It is submitted that the normal gross profit rate obtaining in retail trade in automobile spares of the type of the appellant is 15% to 16%. 5. Considering the fact that the unreal purchases as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have considered the assessment order, grounds of appeal, written submissions of the appellant. I am of the view that the contention of the appellant is not acceptable as the appellant maintains the books of account which are subjected to audit U/s.44AB. Hence whatever be the trade results declared in the return of income are final and there is no question of altering trading results at this juncture. 6.1 Secondly, even if the appellant's contentions were to be accepted the appellant would not get any benefit as per the decision of the Hon'ble Allahabad High Court in the case of Kaveri Rice Mills reported in 157 Taxman 376 that when purchases are bogus, all purchases are to be added and not the Gross Profit (GP) irrespective of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efully perused the materials available on record. It is apparent from the facts of the case that the learned Commissioner of Income Tax (Appeals) has simply brushed aside the arguments advanced before him by the assessee and his learned Authorized Representative but only relied upon the audit report furnished under section 44AB of the Act and thereby came to a conclusion that the accounts drawn by the assessee is genuine with respect to the stock, however held certain sundry creditors to be bogus without further verification. It would have been proper on the part of the learned Commissioner of Income Tax (Appeals) to obtain a remand report from the learned Assessing Officer on the explanation advanced by the assessee before confirming the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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