TMI Blog2016 (2) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... diately preceding year i.e. A.Y. 2007-08. This fact has also not been challenged by the Revenue side that addition in question was made without rejection of books of account. On this issue, there are several decisions, wherein, it was consistently opined that there should be some defects to be pointed out by the revenue department so as to disturb the percentage of profit disclosed. In the absence of such discrepancy, the action of the AO remained un-substantiated. One more reason assigned by the ld CIT(A) before granting relief was that there was no uniform decrease in trading results of all the commodities. Rather in some of the commodities, the post survey profit rate was higher than the rate of profit already assessed in the past years. Therefore, we hereby confirm the findings of the ld CIT(A) and reject this ground of appeal taken by the revenue. Disallowance of remuneration and interest paid to partners - As per the AO, the income surrendered was assessable u/s. 69C i.e. income from other sources , therefore, deduction claimed u/s.40(b) was not an admissible expenditure - CIT(A) deleted the addition - HELD THAT:- As we came to know that in a number of decisions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the post survey accounting period.. The AO has made certain observation as under: Analysis of the trading account prepared by the assessee for the period upto the date of survey and the same prepared for the post survey period revealed that on sales of Rs. 5.40 crores,the G.P. shown before survey was Rs. 2.78% in head office and 5.87% on sales of Rs. 2.25 crores in branch office while after survey on turnover of Rs. 6.86 crores, the assessee claimed loss of Rs. 8,67,181/- in head office and in the branch office GP shown worked out at. 1.49% on turnover of Rs. 3.58 crores after survey. No evidence or justification whatsoever was assigned to prove the loss claimed in head office for the post survey period. Similarly, no evidence was adduced to prove the unreasonable and substantial decline of GP in the branch office for the period after survey i.e. from 5.87% to 1.49%. All this adjustment was planned devised by the assessee only to nullify and adjust the undisclosed income surrendered during survey and to escape from taxation of real income. It is unbelievable in the absence of corroborative evidence brought on record, that the GP of Rs. 14.99 lacs on turnover of Rs. 5.40 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the matter before the ld CIT(A). 6. Before the ld CIT(A), the assessee has drawn attention on the bills and vouchers maintained so also pleaded that the books of account alongwith the evidences were test checked by the A.O.. During the course of hearing, a remand report was also called for by the ld CIT(A). On that basis, ld CIT(A) has held that no discrepancy in the books of account or the bills produced were noted by the AO. The AO has not objected the manner in which the accounts are maintained. There was no rejection of books of account u/s. 145 of the I.T. Act. On these facts, it was pleaded that the assessee was in trading business and in respect of trading results of oil, washing powder and washing soap, it was not correct to hold that gross profit had gone down in the post survey period. The assessee has furnished the pre-survey and post survey percentage of profit of the three commodities as under: Particulars Oil Washing powder Soap Pre- Survey post -survey Pre- Survey post -survey Pre- Surv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions of the parties, we are of the considered opinion that even after the survey operation conducted u/s. 133A on 8.8.2007, no specific defect was referred by the AO pertaining to books of account of the assessee. There was no such allegation that there was suppression of sales or inflated purchases were accounted for in the books of account. Although there was an allegation of suppression of stock and excess cash were found but that was not made the basis of the impugned addition by the AO. The AO had proceeded to compare the trading results of pre survey and post survey period. On this point, the contention before us is that the AO should have examined the profit of the entire financial year. That profit should have been compared with the profit disclosed and accepted in the immediately preceding year i.e. A.Y. 2007-08. This fact has also not been challenged by the Revenue side that addition in question was made without rejection of books of account. On this issue, there are several decisions, wherein, it was consistently opined that there should be some defects to be pointed out by the revenue department so as to disturb the percentage of profit disclosed. In the absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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