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TMI Blog2024 (9) TMI 1692X X X X Extracts X X X X X X X X Extracts X X X X ..... ejecting the books of account of the appellant and confirming the addition of Rs. 51,95,740/-, on the facts and circumstances of the case. b) The learned CIT(A) was not justified in confirming the additions, being the deposits for a part of the year, while adopting the returned income, on the facts and circumstances of the case. c) The learned CIT(A) failed to appreciate that, once the books of account were rejected, the income had to be estimated on a best judgement method and a reasonable percentage of income alone, as prevailing in the industry, had to be considered as income, on the facts and circumstances of the case. d) Without prejudice and not conceding that the rejection of the books of the appellant were bad in law, the learned CIT(A) has not provided an opportunity of hearing before rejecting the books of account, on the facts and circumstances of the case. 4. The learned CIT(A) was not justified in confirming the addition of Rs. 51,95,740/- as income of the appellant, without appreciating that the appellant has offered the entire sale as part of turnover, on the facts and circumstances of the case. 5. The learned CIT(A) failed to appreciate that the depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 053000018362 Rs. 8,29,300/- Total Rs. 51,95,740/- 3. The assessee submitted details in response to notice issued by the AO and copy of sales register showed that business was started in the month of Oct. 2016 and the total turnover is Rs.78,71,394. The AO noted that sales have ben done in cash and there is no name, address or contact details of the customers in most of the cases. Hence cash deposits in the assessee's bank account was treated as unexplained cash u/s. 69A of the Act and amount of Rs.51,95,740 was added to total income of the assessee. Accordingly the assessed income was determined at Rs.58,47,140 including the taxable income declared in the return of income and tax rate u/s. 115BBE was applied on Rs.51,95,740. The assessment was completed on 21.12.2019. Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA). 4. Subsequent appeal was migrated to NFAC as per Notification No.76/2020 dated 25.09.2020 issued by the CBDT. During the course of appellate proceedings, the assessee has filed detailed written submissions which is incorporated by the CIT(Appeals) in his order. The ld. FAA noted some deficiencies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profit, the same cannot be added u/s. 68 of the Act. In support of, he relied on the following judgments:- * CIT v. Kailash Jewellery House (ITA No.613/2010) Delhi HC. * CIT v. Vishal Exports Overseas Ltd. (ITA No.2471 of 2009 Gujarat HC) * New Pooja Jewellers v. ITO [ITA No.1329/Kol/2018 * CIT v. Jaora Flour and Foods (P) Ltd. [2012] 344 ITR 294 * Anantapur Kalpana v. ITO (ITA No.541/Bang/2021) * CIT v. Associated Transport P. Ltd., 84 Taxman 146 * ACIT v. Hirapanna Jewelers in ITA No.253/Viz/2020 * ITO v. Tatiparti Satyanarayan [ITA No.76/Viz/2021] 6. The ld. AR further submitted that the turnover of the assessee is below the threshold limit for compulsory tax audit of books of accounts and he has filed return of income under presumptive basis and rate of net profit is 9.92% on its turnover. Section 44AD also does not specify maintenance of books of accounts. Therefore the lower authorities are not justified in asking books of accounts. The ld. CIT(Appeals) has wrongly rejected the books of accounts of the assessee since the assessee was not required to maintain books of accounts under the special provision for computing profits & gains of business on presum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that sale bills are incomplete in the opinion of authorities below and the entire sales were through cash. The ld. CIT(A) rejected the books of accounts invoking coterminous power of the AO u/s. 145(3) and confirmed the addition made by the AO. From the financial statements it was noticed that the turnover of that assessee is Rs.78,71,394 and the Net Profit is 9.92%. The assessee has taken loan (secured/unsecured) from South India Bank Ltd. and outstanding balance is as under: Details of Secured Loan The South Indian Bank Ltd. Rs.616,179 Details of Unsecured Loan Darshan Bohra 901,500 Deepa 70,000 Lalith 14,000 Sangeetha Bohra 604,533 Smt Sharada Bai 1,580,300 3,170,333 Details of Sundry Creditors Anup Jewellers 3,839,027 Swarna Abhushan 2,833,046 6,672,073 Details of Salary Paid N. Muniraju 70,000 Mohan Kumar 60,000 Suvarna 50,500 180,500 10. The assessee has declared Net Profit as per P&L account of Rs.7,81,110 and bank interest of Rs.581, deduction claimed under Chapter VIA is Rs.1,30,291, resultantly the taxable income is Rs.6,51,400 and tax is paid thereon. 11. Considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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