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2018 (10) TMI 189

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..... Assessing Officer also appears to be on the higher side if we consider such rate of profit in the light of the various decisions cited before us. Adoption of 0.5% as net profit on such undisclosed transactions outside the books, in our opinion, will meet the ends of justice. The grounds raised by the assessee are accordingly partly allowed. - ITA No.90/RPR/2016 - - - Dated:- 1-10-2018 - Shri R. K. Panda, Accountant Member And Ms. Suchitra Kamble, Judicial Member For the Assessee : Shri Sunil Kr. Agrawal, CA. Ms. Laxmi Sharma, CA For the Department : Shri Sanjay Kumar, DR ORDER PER R. K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 24.02.2016 of the ld. CIT(A)- 1, Raipur (CG) relating to assessment year 2011-12. 2. Grounds of appeal by the assessee read as under :- 1. On the facts and in the circumstances of the case and in law, that the ld. CIT(A) has erred in treating the undisclosed bank transactions as trading transactions of its regular course of business , while the assessee has actually done the cheque discounting business and he has only earned commission income from such undisclosed bank transact .....

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..... nce Sheet of the assessee. The Assessing Officer, therefore, issued summons u/s 131 of the I.T. Act, 1961 and recorded the statement of the assessee wherein the assessee stated that the transactions occurred in these bank accounts are related to the commission income and mistakenly due to the fault of the previous accountant it remained to be disclosed in the Balance Sheet. It was further argued that the transactions related to the said bank account are not part of the sale of the business of the assessee and the assessee only earns commission on these transactions. The assessee also submitted affidavits and replies before the Assessing Officer stating therein that it earns commission income which varies from 0.20% to 0.30% of the transactions appearing in the bank accounts. The Assessing Officer, after considering the submission made by the assessee from time to time, made addition of ₹ 87,78,850/- to the total income of the assessee by estimating the net profit @ 3% of such transaction (i.e. ₹ 29,26,28,223/-) appearing in the two bank accounts assuming it as unverifiable sales of the assessee. 7. Before the ld. CIT(A), the assessee made elaborate submission challen .....

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..... e been carried out. For this he gave alibi that the commission book was lost and police station was informed on 01/01/2013. It may be noted that the scrutiny notice was issued on 10/09/2012 and the assessment related to FY 2010-11 the appellant claimed to know of these fact much after the close of the financial year, after the return of income was filed and notice of scrutiny was issued. It shows that the story of commission book being lost is an afterthought to dupe the assessing officer. Even if the transaction is carried through brokers there should not be a reason that the vehicle numbers shown for transportation of goods will be bogus. As per the details furnished by him, the vehicles used were open body truck (for eg CG 04 JD3551 and many others), multi exel tailor (For eg CG 04 JC 2955 and many others), 120 car (CG 07 N9477). Many vehicles were not even registered on the date of transactions. All these facts show that the books of accounts cannot be relied upon. Therefore, the addition made by the assessing officer by estimating profit of business is justified which is hereby sustained and the grounds taken by the appellant are rejected. 8. Aggrieved with such order of t .....

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..... course of assessment proceedings before the Assessing Officer on account of undisclosed bank transaction of ₹ 29.26 crores which come to 0.3% of such transaction. Therefore, such income disclosed during the year under consideration being more than the profit determined in such type cases, therefore, the same should be accepted and no further addition is called for. He accordingly submitted that since the assessee has already offered 0.30% on such undisclosed transaction, therefore, no further addition is called for. He accordingly submitted that the order of the ld. CIT(A) be set-aside on this issue. 13. The ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the ld. CIT(A). He submitted that the assessee in the instant case has not disclosed such bank accounts in the Balance Sheet. The Assessing Officer has very reasonably estimated such profit at 3% of the transaction which has been upheld by the ld. CIT(A). He submitted that the order of the ld. CIT(A) is a speaking order and, therefore, the same should be upheld. 14. We have considered the rival arguments made by both the sides and perused the material available on record. We find the .....

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