9911796707
TMI Blog2022 (11) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... ised in ground no. 2 is against the deletion of Rs. 6,50,000/- by the Ld. CIT(A) on the ground that the said amount is repayment of loan from Mamta Mohta during the year which was given in the earlier year. Issue raised in ground no. 3 is against the order of Ld. CIT(A) allowing 40% on account of expenses from understated sales of Rs. 22,30,523/-. 4. Facts in brief are that the case of the assessee was selected under scrutiny and statutory notices were duly issued and served on the assessee. The assessee filed copy of tax audit report, bank statements of two banks but the supporting books of accounts and documentary evidences could not be produced for verification despite affording several opportunities. Thereafter the AO framed assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the A.O is on account of contra entries in the same bank account pursuant to respective bouncing of cheques as is apparent from cursory look at the relevant entries. The appellant has given the aggregate of such contra entries which amounts to Rs. 1,20,49,544/-. 11.2. It is apparent that the A.O has jumped to the conclusion without appreciating the nature of entries in the bank account, this being to the above extent of Rs. 1,20,49,544/-,the A.O Is wrong. The sale addition figures found by the A.O is thus overstated by that figure. The balance figure of Rs.28,80,523/- Is sought to be explained as received from earlier debtors and loan. As the said claim against the balance of Rs.28,80,523/- is not supported by specific details, I ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed sales during the relevant year at Rs. 5,96,69,131/-, the AO computed the difference at Rs. 1,49,30,067/- and treated the same as excess deposits into bank accounts which remained unexplained and added the same to the income of the assessee. Before the Ld. CIT(A) the assessee furnished the details of various cheque bouncing contra entries which were to the tune of Rs. 1,20,49,545/- and also furnished the detail of earlier year loan received back of Rs. 6,50,000/-. The Ld. CIT(A) on the basis of assessee's submission treated the balance of amount to the tune of Rs. 22,30,523/-as understated sales and after applying 60% to the understated sales directed the AO to add a sum of Rs. 13,38,314/-. The Department is in appeal against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Section 68 of the Act are not applicable to the sundry creditors as in respect of sundry creditors, corresponding purchases are charged to the profit and loss account. The Ld. CIT(A) while partly allowing the appeal of the assessee observing and holding as under: "12. Ground No.3: Incremental sundry creditors and loan of Rs.1,65,00,311/- : The A.O's case is that since the appellant did not fespond to notices and show cause the creditors shown in excess of earlier year figures has to be treated as unexplained cash credit. 12.1. The appellant has given the whole list of sundry creditors as on 01.4.2012 and 31.3.2013. The individual figures against each entries has been given along with the gross purchases and transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(l). Keeping this in mind, I delete the addition by making some addition though, by substituting net profit of this year by the figure of earlier year, which was accepted u/s. 143(3). It is further held that addition under both the issues be limited to net profit based addition (para-12.4) or the addition against under-stated sales (Para-11.3), whichever is high. 12.4. Net profit + based addition :- Addition = 0.75% (last year) [59669131 - 0.60 (current year) = 0.15 [ 59669131] = Rs.89,504/-" 10. We have heard the rival contentions and perused the materials as placed before us. Undisputedly the AO compared the sundry creditors at the year end with the corresponding preceding year and computed the increase in sundry creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X
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