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A.C.I.T Central Circle – 1 Tiruchirapalli Versus Smt. S. Inbajothi W/o Shri V. Subramani

2011 (12) TMI 650 - ITAT CHENNAI

I.T.A. No. 819/Mds/2011 - Dated:- 16-12-2011 - SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER Appellant by: Shri V. Subbarayan Respondent by: Shri Shaji P. Jacob, Sr. DR. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : This is an appeal filed by Revenue for the assessment year 2005-2006 against the order dated 22.02.2011 of Commissioner of Income Tax [Appeals] -VI, Tiruchirapalli. 2. The first issue involved is that the ld. CIT(A) erred in deleting the entire addition m .....

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e appellant submitted as under:- 'As against admitted income of ₹ 1,12,760/-, the learned A.D. assessed ₹ 4,46,303 as income from contract business. The total amount of contracts received by cheque was ₹ 43,03,336/-. In other words, the learned A.O. assessed 10.37% as income. Your appellant wishes to submit that the profit from contracts as estimated by the learned A. O. is too high and arbitrary as he had not disclosed or discussed for the estimate of income. The learned A .....

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eted and justice rendered". I have duly considered the observations of the Assessing Officer and the submissions of the appellant. From a perusal of para 3.3 of the assessment order, I find that the Assessing Officer had not discussed about the accounts of the appellant, except a passing reference to self - vouchers. In other words, the Assessing Officer had not made out a case for rejecting the accounts and thus resorting to a fair estimate of the profit. Further, as pointed out by the app .....

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sing Officer had neither discussed the reasons for estimation nor the basis for such estimation. In the circumstances, I am unable to sustain addition made by the Assessing Officer. Accordingly, I hereby direct the Assessing Officer to adopt income of ₹ 1,12,760/- as against ₹ 4,46,303/- estimated by him. 4. The ld. D.R. Shri Shaji P. Jacob, vehemently argued and supported the order of the Assessing Officer. He submitted that the assessee has filed Return of Income on the basis of es .....

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hat before estimating the income, the Assessing Officer issued a show cause notice which is reproduced in the assessment order itself. Therefore, it cannot be said that the Assessing Officer has not rejected the books of account before estimating the income of the assessee. 5. On the other hand, the ld. A.R. of the assessee Shri V. Subbarayan supported the order of the Assessing Officer. 6. We have heard the rival submissions and perused the orders of the lower authorities and the material avail .....

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ssessing Officer. We find that no specific error in the books of account or supporting vouchers could be brought on record by the Revenue. From the records available before us, it is not clear as to how the books of account of the assessee were incomplete. Further, it is also observed that no specific error in the vouchers produced by the assessee could be pointed out by the Assessing Officer. It is not the case of the Revenue that the self-made vouchers were not verifiable. The assessee explain .....

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the order of the ld. CIT(A). It is confirmed. Ground of appeal of the Revenue is dismissed. 8. The only other issue in this appeal is that the ld. CIT(A) erred in deleting the entire addition made by the Assessing Officer relating to peak credit of ₹ 10.34.382/- without verifying the SB account No. 1190013776. 9. The ld. CIT(A) has observed as under: 7. Addition towards peak credit in bank account &s. 10,34,382:- In para. 3.6 of the assessment order, the A.O. observed as under:- " .....

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n for ₹ 10,34,382/- is added to the total income of the assessee. " In her Written Submissions dt. 26-10-2009, the appellant submitted as under:- "While making the addition of ₹ 10,34,382/- the Assessing Officer observed thus: I "It has been observed that there has been a plethora . . . . .. i • • • The peak credit appearing on for ₹ 10,3,382/- is added to the total income of the assessee . Your appellant is submitting herewith a photo copy of the .....

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the balance Sheet as on 31-3-05 filed along with the original return long before the date of search. Thus the said account is disclosed and the A. O. is in error to treat it as undisclosed (c) Your appellant wishes to submit that the question of assessment of peak credit in a bank account shal1 arise only if it is an undisclosed account. (d) Further, the A. O. has not disclosed the basis on which he arrived at the 'peak credit'. (e) It appears that the learned A.O. had brought to tax the .....

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all, the A. O. did not observe the basic requirement of putting this point across to the assessee during the course of the assessment proceedings, as is evident Dom the pre-assessment notice and thus violated the principles of natural justice. It is prayed that the unjustified addition made by the A. O. may please be deleted and justice rendered. I have considered the observations of the Assessing Officer. and the arguments of the appellant. The contention of the appellant says it all and I hav .....

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