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TMI Blog2025 (1) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirming the rejection of books of accounts u/s. 145(3) of the Act and estimating the Net Profit @ 5% of/Rs. 64,72,750/- (Rs. 1,24,50,750/- (Turnover as per books of accounts) - Rs. 59, 18,000/- (addition u/s. 69A of the Act)) without pointing out any major discrepancies in books of accounts and has been merely driven by his own suspicion and conjectures. (b) The Id. CIT(Appeals) erred in facts and law in rejecting the books of accounts u/s. 145(3) of the Act on the ground that stock register was not mentioned in Clause 11 of Form 3CD, without appreciating the fact that quantitative details were duly mentioned in Clause 35 of Form 3CD. (c) The Id. CIT(Appeals) erred in facts and law in not appreciating that there is no revision of sales/ purchases and any discrepancy found in the DVAT returns. (d) Without prejudice to Ground No. 1(a) to 1(c), the Id. CIT(Appeals) erred in facts and law in estimating Net Profit @ 5%, which is exorbitantly high considering the fact that the appellant firm is engaged in the business of trading in ball bearings, etc." 3. The brief facts of the case are that the assessee's case was selected for scrutiny assessment in CASS in the category of comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r framed assessment u/s 144(1) of the Act. The AO estimated the profit applying GP at 10% of total turnover of Rs. 64,72,750/- i.e. Rs. 1,24,50,750/--Rs. 59,78,000/- and thereby, estimated the profit at Rs. 6,47,275/-. Apart from this, the AO made addition of unexplained money being cash deposit made during demonetization period of Rs. 59.78,000/- u/s 69A of the Act. Aggrieved, assessee preferred appeal before CIT(A). 4. Before CIT(A), assessee contended that the complete details of sales including cash sales were filed before AO and also the details of purchases, sales and comparative chart was filed before the AO. It was contended that the AO has verified the sales made in cash and also compared the turnover of cash sales for the year under consideration as well as previous year. The assessee before the CIT(A) contended that in Financial Year 2015-16 relevant to Asst. Year 2016-17, the turnover was very less because of the initial year of assessee's business and total turnover was Rs. 35.10 lacs. From this year assessee turn over increases and he filed the chart of comparative turn over before the CIT(A) and contended that in future years, the turnover has increased almost three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative turnover quarter wise during the year which reads as under:- Sr. No Quarter Cash Sales Total Sales 1 April 16 to June 16 7,850 88,650 2 July 16 Sep 16 53,437 20,61,254 3 Oct 16 to Dec 16 57,25,332 75,64,020 4 Jan 17 to March 17 26,93,640 27,36,826 Before us, Learned Counsel for the assessee argued that there is variation in sales and purchases but there is in no sudden increase in turnover year after year and he filed the details of turnover and net profit and NP ratio as under:- A.Y. TURNOVER NET PROFIT BEFORE PARTNER'S PREMUNERATION & INTEREST NP Ratio (%) 2016-17 2017-18 2018-19 2019-20 3,510,513 12,450,750 10,235,189 12,523,554 286.671 325,782 241,926 338.772 8.17% 2.62% 2.36% 2.71% From the above, Ld. Counsel for the assessee stated that in Financial Year 2015-16 relevant to Asst. Year 2016-17 turnover was Rs. 35,00,000/- whereas in future years i.e., the year under consideration i.e.,2017-18, the turnover was Rs. 1.24 Cr. and in Asst. Year 2017-18 turnover was Rs. 1.02 Cr. and further in Financial Year 2018-19 turnover was at Rs. 1.25 Cr. Ld. Counsel for the assessee drew our attention to the quarterly sales for Asst. Year 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 68,868 1,13,444 22,68,868 1,13,444 R6.2(2) 4 Local Q3 85,69,306 4.28,456 85,69.306 4,28,456 R6.2(2) 6 Local Q4 28.40,988 1,42,211 28,40,988 1,42,211 R6.2(2) 8 Total 28,40,988 1.42,211 1,08,51,964 5,42.590 1,36,92,952 6.84,801 Note: There are some rounding off difference of less than Rs. 10/- in each quarter In view of the above, Ld. Counsel for the assessee stated that the from the analysis of sales/purchases and deposit made by AO as well as CIT(A) is purely of suspicion and nothing else. He argued that no doubt in earlier Financial Year turnover was as less i.e., Rs. 35,00,000/- as against in the present assessment year's turnover is 1.24 Cr. 8. On the other hand, Sr. DR relied on the assessment order and order of CIT(A). 9. We have heard rival contentions and gone through the facts and circumstances of the case. Admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son not to accept this sale of Rs. 1.24 Cr., which has been disclosed by assessee. In term of the above ground of assessee's appeal is partly allowed. 10. Coming to second issue of addition made by AO and confirmed by CIT(A) of cash deposit made during the demonetization period of Rs. 59,78,000/- u/s 69A of the Act as unexplained money. For this assessee has raised the following ground No.2:- "2(a) The Ld. CIT(Appeals) erred in facts and law in sustaining the addition of cash deposited of Rs. 59,78,000/- u/s 69A of the Act as unexplained money on his own assumptions, without appreciating the fact that the said cash deposited was not out of cash sales which are duly recorded in the books of accounts. (b) the Ld. CIT(A) appeals failed to appreciate that once the books of accounts are rejected and profit is estimated; no separate addition can be made. (c) The ld. CIT(Appeals) erred in facts and law in not appreciating that the cash sales have already been offered to tax and addition thereof again will lead to double taxation which is against the principles of law." 11. The brief facts are that the Assessing Officer after rejecting the books of accounts and after disbelieving t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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