9911796707
TMI Blog2020 (4) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the year along with ITR, balance sheet and bank statement with source to prove the identity, genuineness and credit worthiness of the parties and also file justification for non-allotment of shares. The assessee filed the following chart:- Particulars Opening Balance 01.04.2010 Addition Closing Balance as on 31.03.2011 Rama Ply Board India Private Limited 57,00,000 Satkar Fin Lease Private Limited 40,00,000 Zayatt Construction Private Limited 10,00,000 Total Amount Received during period 01.04.2010 31.03.2011 325,50,000 107,00,000 432,50,000 3. In absence of filing of any confirmation, address, IT particulars and bank statement to prove the identity, genuineness and credit worthiness of the parties from whom share application money was received, the AO made addition of Rs. 1,07,00,000/- to the total income of the assessee. 4. Similarly, the AO observed that there is difference in opening stock and closing stock since the opening stock as on 01.04.2010 was appearing at Rs. 12,15,76,258/- whereas the closing stock shown as on 31.03.2010 was Rs. 11,38,67,290/-. He, therefore, asked the assessee to substantiate the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant's ground of appeal is dismissed on this issue." 8. So far as the estimation of GP at 8% is concerned, the ld.CIT(A upheld the action of the AO by observing as under:- "In view of the above mentioned facts when books of accounts and related documents were not produced during the assessment proceedings, the A.O was left with no option but to complete the assessment on the basis of material on records. Therefore, A.O is fully justified in rejection the books of which has never been produced before him. In view of the factual matrix of the case, I am not inclined to interfere with the decision of the A.O to estimate the income at 8% as per the income declared by the assesses in the relevant field of business. Accordingly, the ground of appeal on this issue is dismissed." 9. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:- "1. That on facts and circumstances of the case, the order passed by the Ld . CIT (Appeal) is bad both in the eyes of law and on facts. 2. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the addition of Rs. 77,08,967/- on account of alleged difference in ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the expenses incurred for carrying out the construction of the properties. The heading of these expenses, thus, suggests that the expenses are relevant for carrying out the business of real estate. He further submitted that no separate addition u/s 69C has been made by the AO vis-à-vis the expenses of Rs. 77,08,967/-. The ld. Counsel for the assessee filed a chart containing the net profit rate for the last four years including the year under appeal. Without prejudice to the above, he submitted that it is the settled proposition of law that once the books are rejected, then, the same books cannot be visited again for making other additions. For the above proposition, he relied on the decision of the Rajasthan High Court in the case of Malpani House of Stones vs. CIT (2017) 395 ITR 385 (Raj). 12. So far as ground of appeal No.3 is concerned, the ld. Counsel for the assessee submitted that the AO has adopted the net profit rate of 8% which has been upheld by the CIT(A). He submitted that in the line of business of the assessee and considering the past results, the net profit cannot exceed 2%. He accordingly submitted that the net profit rate adopted by the AO and the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). However, the same was rejected on the ground that the details of the expenditure and date of incurring such expenditure along with the purpose was not given. However, at the same time, it is also an admitted fact that the books results were rejected u/s 145(3) of the IT Act and the AO has gone for estimation of profit. Considering the totality of the facts of the case and considering the fact that there is difference of Rs. 77,08,967/- in the closing stock of preceding year and the opening stock of the current year, we are of the considered opinion that adoption of net profit rate of 3% on Rs. 2,16,78,967/- (i.e., the turnover of Rs. 1,39,70,000/- + Rs. 77,08,967/- being the difference in stocks) will meet the ends of justice. We accordingly set aside the order of the CIT(A) and direct the AO to recompute the addition by considering the net profit at Rs. 6,50,369/- less net profit already disclosed by the assessee at Rs. 1,15,812/- (subject to verification). Grounds of appeal No.2 and 3 filed by the assessee are accordingly partly allowed. 16. Ground of appeal No.4 relates to the order of the CIT(A) in confirming the addition of Rs. 57 lakhs. 17. The ld. Counsel for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were finally settled in 2014-15. He submitted that during A.Y. 2014-15, the AO in the case of Rama Ply Board India Private Ltd. (now M/s AAA Paper) had made an addition of Rs. 2.7 crore on the ground that it has received a loan from the assessee. However, the CIT(A), after considering the remand report and statements filed by the assessee has observed that M/s AAA Paper has ultimately got a shop in Senior Mall developed by the assessee against their advance and it is not an advance from Nilkamal to AAA Paper. He accordingly submitted that the addition made by the AO and sustained by the CIT(A) should be deleted. In his alternate contention, he submitted that the matter should be restored to the file of the AO or the CIT(A) with a direction to adjudicate the issue afresh in the light of the submissions now made that the amount has already been refunded in the subsequent years through sale of shop. 19. The ld. DR, on the other hand, heavily relied on the order of the CIT(A). 20. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee could not prove the creditworthiness, capacity & genuineness of transaction/loan. Hence, this unexplained loan, was being disallowed and added back to the total income of the assessee u/s 68. 6.2 The appellant submitted that during the relevant assessment year, he had purchased tire commercial property situated at Shoppers' Pride Mali Shakti Chowk, Civil Lines, Bijnor and the consideration of the property was credited in the account of M/s Neelkamal Cineplex Pvt Ltd. There had not been any banking transaction with the party. Appellant submitted confirmation of account, copy of balance sheet, copy of ITR and sale deed of the said, property. 6.3 Remand report was called for from the concerned AO with direction to go through the contents of said submission and send the report vide letter dated 03.07.2017. The AO sent his report vide his letter dated 21.08.2017. In which, the AO mentioned that a notice u/s 133(6) was issued to lender M/s Neel Kamal Cineplax Pvt Ltd to furnish the supportive documents. A reply was received from the lender which was as follows: "We sold the property situates at Shoppers Pride Mall Shakti Chowk, Civil Lines, Bijnor bearing Shop no. 1-8 LGF ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
