TaxTMI 
TaxTMI 
2014 (1) TMI 1181
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.... taken from the appeal No.5794/M/2011 relevant to assessment year 2008-09. 2. The assessee is engaged in the business of trading in diamonds and precious stones in the proprietary concern M/s. Jitendra & Company. The assessee derives income from business, salary house property and income from other sources. 3. A search and survey operation was carried out under section 132 and 133A of the Income Tax Act in the case of one Shri Pravin Kumar Jain and on the persons/entities connected with him on 31.03.08. Since the assessee namely Shri Jitendra Kumar Jain and his concerns were also allegedly connected with the business activities of the said Shri Pravin Kumar Jain and his associates, as such the residence and locker of the assessee were als....
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.... Kumar Jain, even the same was later on retracted. It was also submitted that the assessee had no such business links with the Shri Pravin Kumar Jain. It was also further contended that there was no defect or discrepancy in the accounts of the assessee which were also subjected to audit. Not a single defect was pointed out by the AO in the books of the accounts of the assessee. He wrongly rejected the books of the accounts of the assessee without any convincing reason. It was further contended that the estimation of the income at the rate of 1% of the total turnover was not justified. It was therefore requested that the estimation of income at the rate of 1% made by the AO be deleted and the books of the accounts of the assessee be accepted....
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.... material except a few cheques and two letter heads belonging to other persons was found. The two of the said persons were also examined by the revenue authorities. The purchase parties/sale parties having business links with the assessee responded to the notices served by the AO and furnished the necessary details/confirmations also. Confirmations by the sundry creditors were also filed. No defect in the books of the accounts of the assessee was found by the AO. Merely because the said Shri Pravin Kumar Jain, with whom the Revenue has failed to establish any link of the assessee, admitted in his statement to have given accommodation entries to one person that itself could not be a ground to reject the books of accounts of the assessee. Eve....
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....irect incriminating evidence was found against the assessee. The assessee had given a reasonable explanation relating to some cheques and two letter heads belonging to one Shri Ashok, proprietor of M/s. Kunal Gems, to the effect that the said persons in the name of their different concerns were carrying out their business activities from the same premises from which the assessee had been operating. Even some of the said persons were also examined by the Revenue but the Revenue could not collect any incriminating evidence against the assessee to prove that the assessee was engaged in providing accommodation entries. 13. In the impugned order, the ld. CIT(A) has given a categorical finding that from the record it was seen that no specific de....
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....rcumstances, in my opinion, it would be fair and reasonable to estimate the income @0.5% [net of expenses] 'of the-total turnover instead of 1 % as adopted by the AO. Accordingly, the income is estimated at Rs.28,68,361 [0.5% of 57,36,72,342]. The appellant gets relief of Rs.28,68,361/-. Thus the grounds of appeal of the appellant are partly allowed." 14. In our view, merely because in the opinion of the revenue authorities the income declared by the assessee was less as compared to his annual turnover, that itself cannot be a ground to reject the books of the accounts of the assessee which had been maintained regularly in the due course of business. When the ld. CIT(A) had given a finding that there was no defect in the books of the accou....