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TMI Blog2020 (11) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Revenue reads as follows: "1.That Id. AO has grossly violated the CBDT Instructions while passing the impugned assessment by not limiting himself within the issues only to be verified as directed by CBDT while selecting the case under CASS but widening the scrutiny in other matters, as such, the order impugned is bad in law and liable to be quashed." This ground is general in nature therefore does not require adjudication. 4. Ground No.2 raised by the Revenue reads as follows: "2.That the Id.AO erred for disallowing excess purchase price amounting Rs. 1,75,07,965/- without considering the fact that the effect of such excess pricing had already been neutralized in the Profit & Loss A/c by way of enhancing the closing stock value of almost same value as observed in the assessment order also." 5. The facts qua the issue, which is stated in the assessment order are as follows: "Meanwhile creditors parties viz. M/s Olam Agro India Limited, M/s ljas Cashew company, M/s Ismail Enterprise and M/s Anchuvila Cashew has furnished ledger copies of assessee in their books which is found to be in wide variance with the claim of the assessee as analyzed below: Sl. No. Party Name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g herewith copy of some declarations by the transporters before Kerala Commercial Department. In this situation to avoid litigation & complexities in the matter of valuation in the course of passing through various check posts in different states as well as entering in to the West Bengal I ought to declare the relevant purchase at such excess rate in way bills under WB VAT Rule, 2005 and also debited such overrated purchase in my books of accounts. By this process, during the year under consideration my purchase was overstated by around Rs. 175.08 lacs (sheet enclosed) altogether which ultimately neutralized by enhancing the closing stock value as on last day of relevant financial year by almost same amount [closing Stock Valuation Sheet - enclosed]." Relevant portion of the annexure to the above mentioned letter on overstated purchase is as under: Importer / Supplier Purchase as per books of accounts Purchases as per High Sea Purchase invoice Purchases overstated in the books Ismail Enterprise 4646238 4565788 80450 Anchuvila Cashew 7289870 4392392 2897478 Olam Agro India Limited 39326792 29146362 10180430 Sri Gayatri Cashew 25370370 21020763 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade, commerce and carry on business smoothly without any complexities in bringing the cashews from the Kerala Port to West Bengal and pass through customs and other Statutory Authorities the product was value at 70/- per kg. in accordance with the Kerala State rules and guidelines. As per books of accounts, the appellant had closing stock of 1,90,65,746/- which was enhanced to 3,64,95,009/- by way of addition of such overstated purchase value thereby there was no revenue impact. I agree with the contentions of the appellant that there was no revenue impact and the appellant has conclusively proved that the enhanced purchase value was adopted to ease business and in conformity with the Kerala State Rules. Similarly, the appellant has also valued his closing stock resulting in neutralizing the impact of both the debit and credit sides of the books of accounts. The appellant's Net Profit was 0.88% as declared in the return of income and the assessed income after additions will result in Net Profit @18.62% which cannot be in conformity with the business as compared to preceding years where the Net Profit was 0. 47%, 0.62% and in AY 11-12 @3%. Therefore, in view of the above fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o arrive into the taxable income. 4.That the learned AO has erred to add Rs. 1,09,336/- being the gross profit earned estimated @ 8% on a fictitious sales amounting Rs. 13,66,701/- but adduced no evidence as to the impugned sales transaction. 9. Brief facts qua the issue, as stated in the assessment order are reproduced below: "The assessee is found to have purchased goods worth Rs. 1265464/- from M/s ljas Cashew Company during the relevant year under consideration. On confrontation on this issue AR of the assessee submitted copies of form 50A in order to justify his claim. In this regard M/s ljas Cashew Company was reissued with copies of form 50A for verification. In reply, the said party through their letter dated 26.02.2016 clearly mentioned that "Form no 50A of WBVAT is their documents only and nothing concerned to me." Payment mentioned in the ledger is also found in the bank statement of the assessee confirming said purchase. On this under -shown purchase Rs. 13,66,701/- (Rs. 12,65,464/- x 108/100) calculated @ 8% in absence of G.P. rate is treated as un-shown portion of gross turnover kept-out-of books. Therefore Rs. 1,09,336/- being the profit made thereof is now be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual purchase price at 751.80 per kg., an amount of 26,418/- shall be added back and the appellant gets relief of 82,918/- (109336 - 26418/-). In view of the foregoing, these grounds are partly allowed." 11. Aggrieved by the order of ld CIT(A), the Revenue is in appeal before us.We heard ld. D.R. for the Revenue and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We have heard and gone through the above noted findings of ld CIT(A). We did not find any infirmity in the order of ld CIT(A). That being so, we decline to interfere with the order of Id. C.I T.(A) in deleting the aforesaid addition partly. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. 12. Ground No.5 raised by the Revenue reads as follows: "5.That the Id. AO has erred to add Rs. 4,16,469/- on account of two outstanding creditors as on the last day of financial year without mentioning the relevant section of the income tax Act, 1961 that allows to consider the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a journal entry and nullified the same in their books would not justify additions in the books of the appellant and therefore, the AO is directed to delete the additions of Rs. 2,76,010/- on account of difference of sundry creditor balance with M/s. Olam Agro India Ltd." Likewise, the ld CIT(A) also deleted that addition in respect of other creditor namely, M/s Anchuvilla Cashew" 15. Aggrieved by the order of ld CIT(A), the Revenue is in appeal before us. We heard ld. D.R. for the Revenue and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We have heard and gone through the above noted findings of ld CIT(A). We did not find any infirmity in the order of ld CIT(A). That being so, we decline to interfere with the order of Id. C.I T.(A) in deleting the aforesaid addition. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. 16. Ground No.6 raised by the Revenue reads as follows: "6.The learned AO has erred to consider Rs. 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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