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TMI Blog2018 (10) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... books was found. With reference to the material found in the course of survey, the assessee declared additional income of Rs. 50,00,000/- which was later on revised to Rs. 70,00,000/- towards the profit derived from sales made outside the books of accounts and the circulating capital involved in such business. In the course of assessment the AO noted that the assessee had credited sum of Rs. 31,90,000/- by way of capital introduction in his personal balance sheet. When confronted the assessee explained that balance sheet as on 31.03.2010 was prepared post the survey and hence the such introduction of capital inter alia formed part of the additional income of Rs. 70,00,000/- offered at the time of survey. On further query, the assessee furnished a detailed reconciliation statement along with an explanation. The AO however was not agreeable to the same and added back the said sum of Rs. 31,90,000/- holding that the assessee was unable to substantiate its source. Aggrieved by the impugned addition, the assessee preferred appeal before the Ld. CIT(A), who deleted the addition by observing as follows: " Appellants submission and facts on record is carefully considered. Assessment rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcess of deposit in business capital of assessee over withdrawal was [ 1,68,00,0001- - 1,36,10,000/-] = Rs. 31,90,000/- . This has been reflected in the business balance sheet as capital introduction of Rs. 31,90,000/-. A.O. while analyzing there facts has in his order in fact reversed the submission of assessee by treating movement of cash from cash book savings a/c. and savings a/c , to current a/c in the reverse of what was explained by assessee. He ought to have examined the cash book (even though prepared post survey) and bank a/c to cross-check examine the submissions of assessee. Therefore taking into consideration the disclosure or Rs. 70 lakhs made post survey, assessee is able to explain the entries in personal Balance sheet & Business balance Sheet . There is no contradiction in them as inferred by A.O, as discussed earlier. Therefore, no addition on this head was warranted . The appeal on this ground is allowed." 4. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before us. The Ld. DR appearing on behalf of the Revenue relied on the order of the AO but was unable to point out any infirmity in the above findings of the Ld. CIT(A). After going ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal introduction into the assessee's personal balance sheet to ensure that the income disclosed in the course of survey was correctly brought into the regular books of accounts. 5. After going through the above facts and statement, we find that the assessee had duly reconciled and explained the introduction of capital of Rs. 39,10,000/- in his personal balance sheet and that it indeed formed part of the additional income of Rs. 70,00,000/- disclosed at the time of survey. The Ld. CIT(A) was therefore right in observing that assessee was able to explain the entries in his balance sheet and that the addition of Rs. 39,10,000/- made by the AO was unwarranted. Ground No. 1 raised by the Revenue is therefore dismissed. 6. The second ground of appeal of the Revenue is against the action of the Ld. CIT(A) deleting the addition of Rs. 25,70,949/- made on account of unaccounted transportation expenses. From the facts as available on record, it is noted that the in the survey conducted at the assessee's premises u/s 133A, evidence of sales & purchases outside the books was found. With reference to such business conducted outside the regular books, the assessee had disclosed profit of Rs. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a wholesale dealer of vanaspati, mustard oil, sugar etc. Post the survey u/s 133A, the assessee had re-drawn its books of accounts and submitted the return of income along with the tax audit report& audited accounts. In the course of assessment, the AO observed that the assessee had carried out large scale trades in different commodities but was unable to produce the stock registers so as to enable him to verify the quantitative records. The AO further noted that the profitability of different commodities varied and hence in absence of stock register, it was not possible for him to verify the trading results. For the reasons as aforesaid the AO held that the trading results as reported by the assessee were unreliable. He therefore invoked the provisions of Section 145(3) and rejected the books of accounts submitted by the assessee. The AO was of the view that the GP rate of 0.88% reported by the assessee was on the lower side and hence estimated it at 1.50%. Accordingly he made further addition of Rs. 42,81,400/- to the profits of the assessee. Aggrieved the assessee preferred appeal against the same before the CIT(A), who taking into account the past history of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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