TMI Blog2018 (7) TMI 2085X X X X Extracts X X X X X X X X Extracts X X X X ..... was duly submitted and books of accounts for the preceding years was maintained and the income was reported u/s 44AD - HELD THAT:- As per auditor s report, we find that the auditors have categorically stated that this is the first year of audit, opening balance are taken as certified by the proprietor with due confirmation from the bank statement . Given that, we are of the view that matter will require examination of the said contentions so raised by the ld AR and accordingly the matter to this limited extent is remanded back to the file of the AO. Rejection of books of accounts u/s 145(3) - HELD THAT:- This is the first year where the assessee has carried out the exercise of maintenance of formalized books of accounts and got them audited. At the same time, we find that there are adequate documentation to support the purchase and sales made during the year in terms of ledgers, invoices and purchase confirmations. Further, no specific defect has been highlighted by the ld CIT(A) in respect of other expenses claimed by the assessee. Given the peculiarity of the facts and circumstances of the case, we are of the view that the ld CIT(A) was not correct in rejection of books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, the evidence in support of deduction under section 80C is admitted and the matter is remanded back to the file of the AO to examine the same a fresh after providing reasonable opportunity to the assessee. The ground is thus allowed for statistical purposes. - D.B. Income Tax Appeal No. 149/2018 - - - Dated:- 10-7-2018 - Mr. Justice Kalpesh Satyendra Jhaveri And Mr. Justice Vijay Kumar Vyas For the Appellant(s) : Mr. Daksh Pareek with Mr. Arjun Singh for Mr. Sameer Jain JUDGMENT 1. By way of this appeal, the appellant has assailed the judgment and order of the Tribunal whereby Tribunal has dismissed the appeal of the department and partly allowed the appeal of the assessee for statistical purposes. 2. Counsel for the appellant has framed following substantial question of law:- 1. Whether on the facts and circumstances and in law, the ITAT was justified in rejecting the plea of Revenue regarding deleting the addition u/s 68 of ₹ 4,39,72,094/- as unexplained bank deposit by the CIT(A) without considering the fact that the assessee had declared its income u/s 44AD in its ITR and had failed to furnish its books of accounts before the AO over span ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of estimating N.P. when books of accounts have been rejected u/s 145(3), particularly in the case of the assessee, when N.P. rate is 21.93% in A.Y. 2009-10 and 17.97% in A.Y. 2010-11 and 14.99% in the year under consideration as per the ITR filed and never revised? 3. The fact of the case are that the assessee filed its return of income on 30.09.2011 declaring total income of ₹ 1,58,366/-. However, the matter was selected for scrutiny and accordingly, notices were issued. Looking to the non-cooperation of the assessee, the Ld. AO, proceeded on the basis of bank statement received from Bank of Maharashtra, Govindgarh and invoked section 144 in making the assessment, thereby, making total addition to the tune of ₹ 4,50,50,380/-. 4. Counsel for the appellant has mainly contended that the Tribunal and CIT(A) have committed serious error in ignoring the statement of the Bank Manager and have wrongly assessed on the basis of information submitted in the revised audited statement before CIT(A). 5. In this regard, the relevant observation of the CIT(A) reads as under:- 4.2 It is observed that the assessee had filed his return of income on the basis of unaudited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee s bank accounts in absence of necessary explanation on the part of the assessee. During the appellate proceedings before the ld CIT(A), the assessee has submitted the audited financial statements, which, as pointed out by the ld CIT(A) as well as by ld DR during the course of hearing, have been audited subsequent to completion of assessment proceedings and other details in terms of bank reconciliation statements and other support documentation in terms of purchase confirmations, etc. The same were admitted as additional evidence after seeking the remand report from the AO. The ld CIT(A) observed that the AO in his remand report has only commented partially on certain matters and thereafter, invoking his co-terminus powers examined the relevant facts and related documentation having a bearing on the matter especially the nature of deposits in the bank accounts and payments towards purchase of chicken feed and chicken by the assessee. After detailed examination, the ld CIT(A) has accepted the submission of the assessee that out of cash deposits of ₹ 4,37,07,862 in his bank accounts, an amount of ₹ 3,40,35,960 represents sale of poultry products which has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and closing stock during the year and what has been purchased during the year, the same has been sold during the year, hence, there was no necessity to maintain the stock register and the same cannot be a basis for rejection of books of accounts. We find that the assessee is in the business of purchase and sale of chicks and poultry feed. Sales are made to farmers and Butchers. The assessee purchase broilers from hatcheries and poultry feed from farmers as well as from industrial units. The assessee sold broiler to marginal farmers and poultry units and after 40-45 days the assessee purchase these already supplied broilers from the farmers/poultry units and sale them to butchers. In our view, given the nature of business of the assessee and the turnover of ₹ 3,40,35,960 reported during the year, the count of no. of broilers and chicks purchased and sold, and stock of poultry feed purchased and consumed is desirable and will support the orderly functioning of the assessee s business and reflection of its financial results. At the same time, given that the assessee operates his business in an informal and rural set up with hands on approach, there is a possibility of nonmai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of agriculture income is admitted and the matter is remanded back to the file of the AO to examine the same a fresh after providing reasonable opportunity to the assessee. The ground is thus allowed for statistical purposes. 16. In ground No. 4, the assessee has also challenged the action of ld. CIT (A) in considering the interest income of ₹ 48,231 as income from other sources. In this regard, the ld. AR has submitted that interest income was already declared while calculating business income, Net profit and disclosed in audited profit and loss account and same may be deleted. From perusal of assessment order, we noted that the AO has brought to tax income from other sources as per return of income amounting to ₹ 90,256. However, there is no finding that said figures includes the figure of ₹ 48,231. Hence, the matter is remanded back to the file of the AO to examine the same and where it is found that the figure of ₹ 90,256 already includes the figure of ₹ 48,231, allow the necessary relief to the assessee as the same income cannot be brought to tax twice. In the result, the ground of appeal is allowed for statistical purposes. 17. In groun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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