TMI Blog2021 (10) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer for which we do not find any reason to interfere with. At this stage, the Ld. Counsel for the assessee has submitted that the assessee may be given the deduction of the statutory taxes paid /CST. No justification in this respect as while estimating the gross profits, all the expenditures including the taxes paid have been taken into consideration. There is no merit in the appeal of the assessee. - ITA No.7376/Del/2017 - - - Dated:- 1-10-2021 - Shri R.K.Panda, Accountant Member And Shri Sanjay Garg, Judicial Member For the Appellant : Sh. Devinder Pal. Adv. For the Respondent : Sh. Gaurav Pundir, Sr. DR ORDER PER SANJAY GARG, JM : The present appeal has been preferred by the assessee against the order dated 18.09.2017 of the Ld. Commissioner of Income Tax (Appeals)-12, New Delhi, (hereinafter referred to CIT(A) ) for the Assessment Year 2013-14. The assessee has raised following grounds of appeal:- 1. That in the facts and on the circumstances of the case the impugned order as passed by the Ld. CIT (A) dated 18.09.2017 is bad and against the law as the same is based on surmises, suspicion and conjunctures. 2. That the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de address of the sundry debtors and the creditors. After getting the addresses of the sundry debtors and creditors, the Assessing Officer issued notice to them u/s 133(6) of the Income Tax Act, 1961 (hereinafter referred to the Act ). However, despite repeated notice and reminders to various parties no confirmation was received regarding the transactions in question. All the addresses provided by the assessee in respect of sundry debtors and creditors were received back with adverse postal comments of nonexistence not found etc. Even the confirmation received from two sundry creditors was also find defective/incomplete by the Assessing Officer. The Assessing Officer thereafter, asked the assessee to produce the parties so as to authenticate the sales/purchases and sundry debtor/creditors, but nobody appeared on behalf of these parties. The assessee, however, had shown his inability/control over the respective parties to produce them before the Assessing Officer. The Assessing Officer has drawn a chart in the assessment order in respect of parties whom the notices were issued and status of their responses, which for the sake of ready reference is reproduced as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shiva International 18.11.2015 Reminder sent. Received back with adverse postal comments No such firm . 14 Techno Sales Corporation 18.11.2015 Return back with adverse postal comments Incomplete Address . 15 Vishal Enterprises 18.11.2015 Return back with adverse postal comments Incomplete Address . 16 Yojna Sales (India) 18.11.2015 Return back with adverse postal comments Left 17 Nihal Chand Diwan chand 18.11.2015 Return back with adverse postal comments Incomplete Address . 18 Shree Balaji Enterprises 18.11.2015 Return back with adverse postal comments Incomplete Address . 19 Shri Ram Enterprises 18.11.2015 Retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss profit declared by the. Assessee was @ 0.13% of total purchases. In the assessment order, the Assessing Officer has noted that the notices issued by him to the sundry creditors / sundry debtors remained unanswered. The parties did not confirm the accounts. The notices in respect of sundry debtors were received back with adverse postal comments. Only two parties sent the replies which were incomplete / defective. The Assessing Officer asked the Assessee to produce the parties to prove the sales / purchases. Nobody appeared from the parties. One sundry debtor M/s Vandana International Exports, Jaipur denied-to have done any business with the Assessee. Two sundry creditors namely M/s Kay Pan Fragrance Private Limited and M/s Kay Pan Masala Private Limited sent incomplete confirmation. The Assessing Officer asked the Assessee .to show cause why books of account be not rejected as per provisions of section 1.45(3) of the I.T. Act. According to the Assessing Officer GP @ 0.13% was very low. despite the fact that no significant expenses were ^incurred. On page 4 5 of the assessment order, the Assessing Officer has prepared the list of the parties which did not reply the notices sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is Rs.l.91 and the profit is 0.046 Paise per pack i.e. 2.3%. It is further submitted that the position of further companies in this trade is same. It is argued that the above margins are for the manufacturer. The Assessing Officer is not entitled to make a pure guess with reference to any evidence or material. There must be something more than mere suspicion to support an assessment order u/s 143(3). Since the Assessee is the first stage person in the marketing sale and has to take care of chunk of profit in supply chain, therefore, the GP earned by him is in consonance and agreement with his trade practices and beyond doubt. 6.3.3 I have gone through the relevant facts of the case'and submission of the Appellant. The Assessing Officer has admitted that purchases are from two parties namely M/s Kay Pan Fragrances Private Limited and M/s Kay Pan Masala Private Limited. The confirmations from these two parties, though incomplete, were received. But the major problem was with respect to the confirmation from the sundry debtors in respect of which it is stated by the Assessing Officer that none of these parties confirmed the transactions with the Assessee. The letters sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the reason that two activities are different, the profits shown by him show some indication in this line of business. Generally, the profit margin in this line of business is higher than one shown by the manufacturer. Based on the above facts and figures, I uphold the decision of the Assessing Officer and confirm the consequential addition of ₹ 1,44,13,587/-. All the grounds are decided accordingly. (confirmed : ₹ 1,44,13,587/-) 7. In the result, the appeal is dismissed. 6. Being aggrieved by the aforesaid order of the Ld. CIT(A), the assessee is in appeal before us. 7. We have heard the rival contention and gone through the record. It is to be noted that in this case, the assessee has shown very less profit as against huge turnover. Notices were sent to the parties to verify the purchases/sales. Notices were also issued to the sundry debtors and creditors. None of the sundry debtors confirmed the transactions. Even, most of the notices were received with report of the postal authority no such firm . Even one of the party namely Vandana International Export (Jaipur) has categorically denied any kind of financial or trade transaction with the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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