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TMI Blog2024 (3) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... e online e-filing portal. The case was selected for limited scrutiny by CASS. Notice u/s 143(2) of the Act was issued on 28.08.2015 which was duly served. During the year the assessee has added a loan of Rs. 1,07,92,593/- in its Balance Sheet under the head 'Ex-partner Loan. The assessee was asked to produce the books of accounts for verification. Till date no explanation of the said addition has been made by the assessee or any of the documents called for have been submitted. This fact was specifically mentioned in the show cause letter for ex-parte assessment issued to the assessee. In view of non submission of any information from the assessee the only information available with the ld. AO is the balance sheet of the previous year and current year of the assessee which the assessee is mandated to upload on the online portal of e-filing. Hence, in view of the above the said addition of Rs. 1,07,92,593/- was made as unexplained cash credit u/s 68 of the Act. The assessee has claimed various expenses in it's Profit and Loss Account (P&L) but no proof of any of the expenses has been either submitted or produced for verification as called for on various occasions. This fact was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the assessee is mandated to upload compulsorily online on the e-filing portal. It is seen that the creditors in the AV 2013-14 amounted to Rs. 35,89,082/-, In such a case only the balance amount of creditors added in the Financial year 2014-15 are liable to be considered unverifiable. In view of complete lack of any verifiability, the entire amount of Rs. 1,86,79,561/- is considered unverifiable and added u/s 68 of the Act. Based on the above observation, the assessment was completed u/s 143(3) of the Act on 29.11.2016 4. Aggrieved from the order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A) and the ld. CIT(A) apropos to the various grounds so raised has given a detailed finding and based on that the appeal of the assessee was partly allowed. The relevant finding of the ld. CIT(A) on the issue raised before him is reproduced herein below:- "05. Vide ground no. 4, the appellant contended that the AO erred in making addition of Rs. 1,09,92,593/- on account of disallowance of ex-partners loan. Vide order passed u/s. 154 dated 29-03-2017, the AO had already deleted this addition. Hence, this ground becomes infructuous. 06. Vide ground no. 5, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of profit. Similarly, in the decision in the case of Action Electricals Vs. DCIT - reported in 258 ITR 188 it has been held that estimation of GP rate based on past results cannot be said to be arbitrary. Similar view has been approved in the case of Smt. Krishna Babbar Vs. CIT reported in 123 Taxman 992 as also Panna Lal Jat Vs. ACIT reported in 26 Taxworld 447. The Hon'ble ITAT, Jodhpur Bench in its decision in the case of ITO Vs. Kundan Mal Surana reported in 3 SOT 632 - observed that for making addition, after applying the provisions of section 145, it is imperative on the part of the AO to apply a particular GP rate either with reference to the past history of the assessee or with reference to other comparable cases available. Identical view has been expressed by the Hon'ble ITAT, Jaipur Bench in the case of Navneet R. Jhawar Vs. ITO reported in 1 SOT 541. The Hon'ble again in its decision in the case of Asian Const. CO. VS. ITO reported in 34 Taxworld 89 held that past history is the best guide of true trading results. Identical decision has also been given by the Hon'ble ITAT Jodhpur Bench in the case of Sri. Ram & Co. Vs. ITO reported in 32 Taxworld 225. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer for his comments/report. The Assessing Officer vide report dated 26-02-2018 submitted that out of the total claim of provision of Rs. 41,87,052/-, Rs. 4172132/- has been verified and only Rs. 13,476/- (TDS payable) and Rs. 1,444/- (interest on TDS) could not be verified. The Assessing Officer's report was also provided to the appellant for rebuttal and in response, the appellant stated that since the Assessing Officer has himself verified Rs. 4172132/- as the payment made during the next year except Rs. 14,920/-, therefore, it does not want to press unverified amount of Rs. 14,920/-. Considering these facts and Assessing Officer's report, the addition made at Rs. 41,87,052/- is sustained to the extent of Rs. 14,920/- only. The appellant gets partial relief. The ground of appeal is partly allowed. 09. Ground no. 9 relates to the addition of Rs. 1,86,79,561/- u/s. 68 of the Act. The Assessing Officer noted that the assessee had shown creditors to the tune of Rs. 1,86,79,561/- in its balance sheet. Since no details were furnished before the Assessing Officer to prove the identity, creditworthiness of the creditors and genuineness of the transaction, therefore, the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in respect of AY 2015-16 and I find that there is no discussion regarding the issue of sundry creditors. Hence, it cannot be said that the appellant has explained these creditors in subsequent year. The fact is that these creditors pertained to AY 2014-15 i.e. year under consideration where, the appellant failed to furnish their identity, creditworthiness and genuineness either before the Assessing Officer or before undersigned. Considering the facts of the case in totality, the addition of Rs. 16,39,926/- is hereby confirmed. The ground of appeal is partly allowed." 5. Since the appeal of the assessee was partly allowed granting the relief to the assessee not in full and therefore, assessee has filed the appeal in ITA 232/Jodh/2018 and on the other hand the Revenue feeling dissatisfied filed the appeal in ITA No. 299/Jodh/2018. 5.1 In ITA No. 299/Jodh/2018 the assessee has raised following grounds: - "1. That the order passed by the learned authorities below are against Law- Equity-Justice & facts of the case. 2. That the learned AO had seriously erred in applying a profit rate of 20% on the contract receipt amounting to Rs. 11,66,37,877/- against the rate of profit declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t declared by the assessee @ 8.13% in support of the ground and considering non compliance before the lower authorities. The Ld. AR of the assessee fairly admitted instead of 14% estimated by the Ld. CIT(A) if the estimation of 11% be made so as to give justice to the assessee as against the 8 % disclosed by the assessee and the same is generally also considered by the provision of section 44AD @ 8 % but considering the overall fact he prayed in the open court that if the profit is estimated @ 11 % which will end the justice. Considering that aspect of matter we deem it fit to estimate the profit @ 11 % in the interest of justice to the parties. Based on this observations ground no. 2 raised by the assessee is partly allowed. 7. Ground No. 3 making addition of Rs. 16,39,926/-. The Ld. AR of the assessee submitted that the amount of Rs. 16,39,926/- should be sustained by the Ld. CIT(A) is of the old sundry creditors payable by the assessee and reflected in the books of the account of the assessee and the same is not related to the year under consideration and therefore, considering the facts of the case that when the books of account of the assessee are rejected and the profit is e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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