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TMI Blog2018 (6) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, condone the delay and admit the appeal for adjudication. 5. Briefly stated, the facts of the case are that the assessee is engaged in the business of Trading of ferrous and non-ferrous metals. During the previous year 2009-10 relevant to assessment year 2010-11, the assessee had shown gross profit of Rs. 27,97,918/- on the gross turnover of Rs. 19,99,28,840/- @ 1.39% as against gross profit of Rs. 14,76,041/- @ 1.34 % on the gross turnover of Rs. 10,95,86,336/- declared in the immediately preceding assessment year. The AO on examination of profit and loss account found that the assessee had shown a meager net profit ,of Rs. 13,43,733/- on the gross turnover of Rs. 19,99,28,840/- @ 0.67 %. The AO found that the ,opening and closing stock was shown at Rs. 2,43,34,974/- and Rs. 2,19,67,500/- respectively. On examination from Audit Report, the AO further found that the assessee had shown huge quantity of various items. The AO found that the assessee had no godown and had not debited any expenditure under the head Godown Rent. The found that the assessee's purchase goods was kept in a godown situated at Navdurga Compound Village Wall Bhiwandi Distt. Thane. On enquiry from C.A. , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leted. The CIT(A) erred in confirming the addition, Assessee has showed net profit at the rate of 1.39 % on total turnover during the year which was better than net profit rate of 1.34 % shown by them in preceding previous year. In the case of CHANDI MARBLES PVT. LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX ITA No. 355/Jodh/2014 (2014) 41 CCH 0094 Jodhpur Tribunal held that no addition can be made when gross profit rate of assessee was better in comparison to immediately preceding year, even if books of accounts were rejected. Thus CIT (A) was not justified in confirming the increase in the rate of net profit. In the case of ASHOK KUMAR & COMPANY vs. INCOME TAX OFFICER, ITAT, AMRITSAR 'SMC' BENCH (2003) 22 CCH 0332 Asr Trib, (2004) 90 TTJ 0666 : (2004) 2 SOT 0518, it was held that AO was not justified in rejecting the books and making addition by applying a higher NP rate where, inter alia, no specific defects were pointed out in the audited books of account. Further in the case of INCOME TAX OFFICER vs. BHARAT INT UDHYOG, ITAT, JODHPUR TRIBUNAL (2013) 37 CCH 0462 Jodh Trib,(2014) 159 TTJ 0001 (Jd)(UO) : (2015) 152 ITD 0001 (Jodhpur) it was held that CIT(A) without look ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid question has been referred to this court for opinion. On a perusal of the order of the Tribunal, it clearly appears that whether the said transactions were bogus or not was a question of fact. The Tribunal has also pointed out that nothing is shown to indicate that any part of the fund given by the assessee to' these parties came back to the assessee in any form. It is further observed by the Tribunal that there is no evidence anywhere that these concerns gave vouchers to the assessee. Even the two statements do not implicate the transactions with the assessee in any way. With these observations, the Tribunal ultimately has observed that there are certain doubtful features, but the evidence is not adequate to conclude that the purchases made by the assessee from these parties were bogus. It may be stated that the assessee was given credit facilities for a short duration and the payments were given by cheques. When that is so, it cannot be said that the entries for the purchases of the goods made in the books of account were bogus entries. We, therefore, do not find that the conclusion arrived at by the Tribunal is against the weight of evidence. In that view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition to having made payments through Ale. Payee cheques, the assessee had also produced TDS Certificate in support of its claim. The Assessing Officer observing that such cheque payments could have been withdrawn and reverted back to the assessee were not based on evidence. We find no infirmity in the order of the Tribunal. Accordingly, Tax Appeal stands dismissed. " 4. Since there is no dispute with regard to the fact that the issue involved in these appeals is covered by the aforesaid decision of this Court, we dismiss both these appeals and the questions posed for our consideration are answered in favour of the assessee and against the revenue." As regards addition for bogus purchases from the material available on record, it appeared that the Tax Audit Report and books of account were accepted by the Assessing Officer without pointing out any defect, Accordingly, the sale was accepted by the department. The sale could not be made without making purchase, in other words, when there was a sale, certainly there was a purchase. Sale was accepted by the department but not the purchase: The payments were made through account payee cheques which were duly shown in the books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty of Rs. 15,81,940/- u/s 271(1)(c) of the Income-tax Act, 1961. 12. This appeal is also barred by time by 29 days. The Ld. Counsel for the assessee has submitted an application seeking condonation of delay stating that due to death of his brother, the assessee could not file the appeal in time. The assessee has also submitted a death certificate alongwith paper cutting as evidence. To this effect, the assessee has filed an affidavit also. 13. We have perused the application and affidavit alongwith death certificate. The reasons as stated in the application demonstrates a reasonable cause. We, therefore, condone the delay and admit the appeal for adjudication. 14. The Ld. Counsel for the assessee contended that the assessee got audited the books of account by a Chartered Accountant and the auditors had not given any adverse comments in respect of maintenance of books of account of the assessee. Further the assessee filed his return of income on the basis of audited books of account. Thus, there was no concealment of income and inaccurate particulars was furnished by the assessee. He further contended that the penalty u/s 271(1)(c) can be levied only if the AO is satisfie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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