TMI Blog2018 (5) TMI 1968X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition on unexplained share transaction - HELD THAT:- Profit on sale and purchase of share was adopted @ 3% in view of the statement made by the Shri M.B. Joshi director of the appellant company. However, at the time of hearing before the CIT(A), the assessee contended that the income @ 3% is on the higher side. No comparable prices were produced on record. The CIT(A) assessed the income on the basis of other transaction @ 1.5%, therefore, he found reasonable to assess the profit ratio on account of sale and purchase oh shares @ 1.5%. No distinguishable material is on record. The assessment was based on the estimation basis. We nowhere found any material to interfere the finding of the CIT(A) on record. Therefore, we confirmed the finding of the CIT(A) on this issue and decide these issues in favour of the revenue against the assessee. - I.T.A. No. 4876/Mum/2014, ITA. No. 4875/Mum/2014 - - - Dated:- 29-5-2018 - SHRI R. C. SHARMA, AM AND SHRI AMARJIT SINGH, JM For the Revenue : Shri V. Vidyadhar (DR) For the Assessee : Shri Baboolal M. Ostwal (AR) ORDER PER AMARJIT SINGH, JM: The assessee has filed the above mentioned appeals against the different ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e custody of the Sales Tax Authorities. A search action u/s 132 of the Act in July/Aug 1998 was initiated in the case of Krishna Filaments Ltd and other cases of that group. It was found that the assessee company was issuing accommodation bills to certain parties including Krishna Filaments Group. Action u/s 133A of the Act was taken and statement of Shri B.B. Joshi was recorded. Enquiry reveals that no transaction resulting in the delivery of goods took place. The assessee nowhere took the delivery and gave the delivery goods though shown as purchased and sold in the books. After recording each and every facts of the case, the books of account of the assessee was rejected and the profit ratio @ 3% was assessed on a sale and purchase. The assessee was not satisfied, the assessee filed an appeal before the CIT(A) who restricted the addition to the extent of 1 on the sale and purchase. Aggrieved by this order also, the assessee filed the present appeal before us. 5. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. A search and seizure action was taken u/s 132 of the Act in the case of Krishna Filaments Group. It was disclosed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-.gt the rate of 1,5%.I further agree with my learned predecessor that actual turnover of bogus sales and purchase can be taken at ₹ 16,59,91,616/-, which includes purchase of ₹ 12,77,80,307/- and sales of ₹ 3,82,11,309/- with the outside parties and turnover happening within the group concerns is not considered. as there is no likelihood at earning any broke rage /corn mission/service charges from the group concerns. The learned AO has nowhere rebutted the finding of my predecessor, either regarding profit rale of 1.5% or adaption of the turnover of ₹ 16,59,91,616/--. He has simply passed the assessment in a summary manner, without realty examining the relevant issue, in light of Hon ble ITAT's order and simply repeated the additions made in the original assessment order. Therefore, resulting income @ 1 5% on turnover of ₹ 16,59,91,616/- works out to ₹ 2 4,89 ,874 /-, or ₹ 25,00,000/-. Therefore, out of the total addition of ₹ 80,07,149/- an amount of ₹ 25,00,000/- is confirmed and the remaining amount of Rs,25,00,0007- is confirmed and the remaining amount is directed to be deleted. 6. On appraisal of the above said f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of ₹ 3,89,595/-. Thus, the appellant gets a relief of ₹ 1,94,797/- on this account, and this ground of appeal is partly allowed. 8. The AO noticed the assessee s transaction of shares belonging to Krishna Filaments Ltd. and M/s. Krishna Vinyls Ltd. The AO estimated the profit @ 3% on purchase of shares and sales of share. The estimation of 3% by the AO was on the basis of sale and purchase of share of M/s. Satyanand Prasad Finance P. Ltd which was @ 6% profit on sale of shares. Therefore, the profit on sale and purchase of share was adopted @ 3% in view of the statement made by the Shri M.B. Joshi director of the appellant company. However, at the time of hearing before the CIT(A), the assessee contended that the income @ 3% is on the higher side. No comparable prices were produced on record. The CIT(A) assessed the income on the basis of other transaction @ 1.5%, therefore, he found reasonable to assess the profit ratio on account of sale and purchase oh shares @ 1.5%. No distinguishable material is on record. The assessment was based on the estimation basis. We nowhere found any material to interfere the finding of the CIT(A) on record. Therefore, we confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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