TMI Blog2015 (6) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... ncriminating material suggesting that book results should be rejected the addition cannot be made on estimate basis in the assessment made u/s. 153A. Accordingly, the addition is deleted. Hence, this ground of appeal filed by the assessee is allowed. - I.T.A. No. 1391/HYD/2010 - - - Dated:- 17-6-2015 - Smt. Asha Vijayaraghavan, Judicial Member And Shri Inturi Rama Rao, Accountant Member For Assessee : Shri P. Murali Mohan Rao, AR For Revenue : Shri D. Sudhakar Rao, CIT-DR ORDER Per Inturi Rama Rao, A.M. : This is an appeal filed by the assessee against the order of the CIT(Appeals)-IV, Hyderabad, dated 30-09-2010 for the AY 2007-08 raising the following grounds of appeal: 1) The Honourable CIT Appeals - IV, Hyderabad erred while confirming the order passed by Assessing officer erred by estimating the income of the assessee at 6% of the gross receipts without rejecting books of accounts. We would like to submit that the Assessing officer has not rejected the books of the assessee and unless the books are rejected the additions on the basis of estimation cannot be made. 2) The assessee made the sales during previous year amounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.Abdul Rehman also admitted that he did not received any amount towards the loan. Hence the assessee is praying to consider that the cheques were received as advance for scrap and to delete the addition made to assessed income. 9) The assessee has claimed the deduction under section 80U of ₹ 50,0001- for physical disability and submitted a certificate issued by the civil surgeon, Gandhi Hospital in support of the claim. The CIT(A) erred by making the disallowance of said amount without considering the explanation offered by the assessee which is not correct, not justified and bad in law. 10) The assessee is praying to give a fresh opportunity to produce the certificate regarding the disability and to take the same in to account while assessing the total income of the assessee and to decide the matter in favour of the assessee. 11) The Order of the CIT Appeals may be set aside and sent back to Assessing officer for redoing the same. 12) The CIT Appeals - IV, Hyderabad erred while confirming the order passed by Assessing officer while not considering the explanation given by the Assessee Company and initiated penalty proceedings under section 271 (1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, notice u/s. 153A was issued calling upon the appellant to file the return of income. In response to which, the appellant filed return of income for the assessment year under consideration admitting income of ₹ 5,14,040/-. Against the said return of income, assessment came to be completed u/s. 143(3) r.w.s 153A of the Act vide order dt. 30- 11-2009 at a total income of ₹ 25,11,950/-. While doing so, the AO made several additions by holding that the appellant is engaged in the business of money lending and rejected the book results. During the course of search, the following blank original signed cheques/promissory notes were found and Xerox copies of the same were seized: S.N Date of Cheque Cheque No. Name of person issued the cheque Amount mentioned on cheque (Rs.) 1. 22-07-2006 255466 M/s. Hind Steel Traders 1,00,000 2. 31-05-2006 423094 M/s. Saif Steels 2,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oan transaction. The other cheque for ₹ 2,00,000/- was issued by Mr. Abdul Rehman, properties of M/s. Saif Steels. 4. During the course of assessment proceedings, summons have been issued to Mr. Shaik Abdul Nayeem and Mr. Abdul Rehman and their statements were recorded Us 131 of the Act. Mr. Shaik Abdul Nayeem is Prop. of M/s. Mount Steel Traders, which is dealing in purahse and sale of iron scrap. He confirmed that he had issued an account payee cheque along with a promissory note of the value of ₹ 10,00,000/- on 24-04-2006 to the assessee for supply of iron scrap. Mr. Nayeem also stated that he was not supplied with the iron scrap as promised by the assessee. Similarly, Mr. Abdul Rehman is Proprietor of M/s. Saif Steels, which is also dealing in purahse and sale of MS scrap. He also confirmed having issued cheque on 31-05-2006 for ₹ 2,00,000/- as a security against supply of MS scrap by the assessee. Mr. Rehman also stated that he was not supplied with a stock of scrap as promised by the assessee. From the above two statements, it can be observed that both of them are giving the same explanation for the cheque/promissory note found in possession of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el Traders, ii. M/s. Saif Steels, iii. Shri Nayeem, iv. Shri P. Madhusudhan and v. Shri Manish Agarwal All the above persons have confirmed that cheques have been handed over to the appellant only as a measure of security for supply of scrap or for the purpose of obtaining the loan, but all of them have denied having obtained any loan from the appellant. The statements given by those people remains uncontroverted. Though the AO is justified in entertaining doubt that the appellant is engaged in the business of money lending and the cheques have been obtained, only after the amounts were advanced since in the absence of any positive evidence in support of the appellant having lent money to the above persons, we are not in a position to confirm the addition. Accordingly, the additions are deleted. 8. As regards ground relating to estimation of profits, we heard the rival parties. Admittedly, there is no incriminating material seized as a result of search and seizure operation indicating that the Books of Accounts maintained by the assessee are either defective or appellant had inflated the expenditure or suppressed the sales resulting in lower retu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
