TMI Blog2018 (3) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and applied profit rate and making addition by enhancing the income of ₹ 6,09,366/- to ₹ 19,57,569/-. We find from the above facts in entirety that the Assessing Officer cannot blow hot and cold at the same time for the reason he has made twin additions out of the trading results i.e., treating the cash sales as cash credit and adding the same u/s 68. AO is very well within the power of rejecting the book results u/s 145(3) and we confirm the action of the Assessing Officer. However, we find that the Assessing Officer has applied profit rate of more than 8% and assessee’s nature of business is trading in steel and iron, which does not give this much profit and assessee’s regular profit is assessed at the rate of 2.5% to 3% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h sales made by the assessee and treated the same as unexplained cash credit in books of account. The addition made by Assessing Officer and confirmed by CIT(A) needs to be deleted. 2. That the learned CIT(A) has committed gross mistake in sustaining the order of Assessing Officer, wherein, once the Assessing Officer has rejected the books of account and calculated the net profit u/s 145(3) himself, the addition made on account of any credit entry cannot be made u/s 68 and the addition made on account of unexplained cash credit needs to be deleted. 3. That the learned CIT(A) has committed gross mistake in sustaining the order of Assessing Officer whereby CIT(A) has confirmed the value of stock as calculated by Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in second appeal before the Tribunal on both the issues. 4. We have heard rival contentions and gone through the facts and circumstances of the case. We have gone through the bare finding of the Assessing Officer who has recorded the fact for rejecting the books of account and estimating the cash sales as unexplained cash credits. According to the Assessing Officer, these cash sales are cash credits and, for this, he has recorded the following reason in paragraph 11, which reads as under :- 11. The cash sales of the assessee are not genuine and can be termed as introduction of unaccounted money under the garb of cash sales. The reasons for such a finding are as under : (a) The difference between the two sets of books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the parties. Admittedly, these are trade creditors and not cash creditors because the assessee has deposited the cash in its trading bank account out of the proceeds of sales, although those are not verified. It means that these have relation with trading entries and these are not independent cash credits. On the other hand, the Assessing Officer is also rejecting the books of account u/s 145(3) of the Act and applied profit rate and making addition by enhancing the income of ₹ 6,09,366/- to ₹ 19,57,569/-. We find from the above facts in entirety that the Assessing Officer cannot blow hot and cold at the same time for the reason he has made twin additions out of the trading results i.e., treating the cash sales as cash credit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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