TMI Blog2019 (10) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... to 4 days but within a maximum time limit of 15 days. He stated that no interest as such was paid to the farmers for delayed payment. A.O. observed that the total turnover reflected in the books of accounts during the year under consideration is ₹ 71,73,13,479/- and in the judgement of ITAT in the case of Shri Amar Agrawal [ 2013 (7) TMI 1139 - ITAT INDORE] , net profit was determined at 5% of total turnover. A.O. was of the view applying the same rate of net profit, excess income of ₹ 1,98,92,774/- has been escaped assessment. Now it is to be determined whether the assessment has been rightly reopened or not. There is no dispute with regard to the fact that there was no other material before the A.O. except the report of the DDIT (Inv.) and observation made therein. Another fact that compelled the A.O. was decision of this Tribunal rendered in the case of Amar Agrawal [ 2013 (7) TMI 1139 - ITAT INDORE] . CIT(A) has decided this issue in favour of the assessee by holding that the A.O. failed to bring any fresh evidence for information regarding escapement of income. We do not find any fault in this finding of the CIT(A) as admittedly, in original proceedings, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was reopened for assessment and the assessment u/s 147 r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter called as the Act ) was framed vide order dated 28.12.2016. The basis of reopening of the assessment was that on enquiry by DDIT (Inv.)-II, Indore, it was revealed that entries regarding purchase of goods and its payment to farmers having been recorded in the books of accounts were not found satisfactory. The A.O. while framing the assessment adopted the net profit @ 5% relying on the order of the Tribunal rendered in the case of Ajay Kumar Agrawal in ITA No.611/Ind/2012. Aggrieved by this, the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions partly allowed the appeal. Thereby, the Ld. CIT(A) quashed the action of reopening of the assessment and on merit restricted the addition to the extent of ₹ 14,77,718/-. Aggrieved by this, both revenue and assessee have challenged the finding of the Ld. CIT(A). 3. Ground No.1 of the revenue s appeal is against finding of Ld. CIT(A) holding that reopening of assessment as bad in law being based upon purely on the report by the DDIT (Inv.). Ld. CIT(DR) Ms. Ashima Gupta veheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 dated 20.8.2013, in which the Tribunal was pleased to apply net profit at 5%. He submitted that facts of the said decision are completely different as in that case, there was lower turnover coupled with the finding that payments to the farmers was made out of undisclosed sources and this is not so in the present case. He submitted that A.O. completely lost sight of the facts that in the present case, major purchases have been made from registered dealers for which various indirect taxes in the form of VAT, CST and entry tax were paid. It is further submitted by the Ld. Counsel for the assessee that the A.O. failed to appreciate the fact that out of total purchases, the purchase of rice for ₹ 32,18,061/-, cotton seed of ₹ 1,89,81,014/- and kapas of ₹ 4,36,01,838/- was tax paid and the purchases were not made from the Mandi committee but were purchased from traders for which payment was made through banking channels. Under these undisputed facts, the Ld. CIT(A) was justified in coming to the conclusion that the reopening is based on the change of opinion as such same is not permissible under the law. He further contended that law is well settled that if there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndi Act nor made additional payment @ 1% per day of the agricultural produce payable to the seller between the period of purchase and actual payment. It was further observed that Shri Nilesh Gandhi during the statement admitted that cash is paid to the farmers on the same day or within 3 to 4 days but within a maximum time limit of 15 days. He stated that no interest as such was paid to the farmers for delayed payment. Further, the A.O. observed that the total turnover reflected in the books of accounts during the year under consideration is ₹ 71,73,13,479/- and in the judgement of ITAT in the case of Shri Amar Agrawal (supra), net profit was determined at 5% of total turnover. Therefore, the A.O. was of the view applying the same rate of net profit, excess income of ₹ 1,98,92,774/- has been escaped assessment. Now it is to be determined whether the assessment has been rightly reopened or not. There is no dispute with regard to the fact that there was no other material before the A.O. except the report of the DDIT (Inv.) and observation made therein. Another fact that compelled the A.O. was decision of this Tribunal rendered in the case of Amar Agrawal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue s appeal also deserves to be rejected. 11. Now we take up the assessee s appeal in ITA No.567/Ind/2017 for the A.Y. 2010-11. The assessee has raised following grounds of appeal: 1.00 That, on the fact circumstances of the case, Hon'ble CIT(A) has erred in law by estimating the Net profit at 2.60% even though reassessment proceedings germane to the additions have been held to be invalid by the Hon'ble CIT(A) himself. 1.01 That, assessment order passed by the Ld. A.O. on 28th December, 2016 was pursuant to the notice issued under section 148 and since the Hon'ble CIT(A) himself, the assessment framed on 28th December, 2016, itself was illegal and invalid and should be quashed. 12. Ground No.1.00 and 1.01 are against estimating the net profit @ 2.60%. Ground No.2 is general in nature needs no separate adjudication. Therefore, the only effective ground is against applying the net profit at 2.60%. Ld. Counsel for the assessee submitted that Ld. CIT(A) had decided the issue of reopening of assessment in favour of the assessee, wherein the Ld. CIT(A) held that the reopening is bad in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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