TaxTMI 
TaxTMI 
2015 (1) TMI 774
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....law, the Ld. CIT(A) has erred in deleting the addition made on account of unexplained investment u/s. 69B of Rs. 2,87,570/-." 2.1 In ITA No. 2544/Ahd/2010 for A.Y. 2007-08, Revenue has filed the appeal on the following grounds: "[1] On the facts and circumstance of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO in respect of addition u/s 68 of Rs. 4,85,000/- on account of unexplained cash credit. inspite of the assessee failing to discharge the onus cast on him to prove the creditworthiness of the creditors and the genuineness of the transactions. [2] On the facts and circumstance of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO in respect of addition of Rs. 2,88,43,616/- made on account of suppression of sales inspite of material evidence brought on record to prove the unaccounted production of the assessee." 3. Assessee is engaged in business of sizing and processing of yarn. First issue in Revenue's appeal for A.Y. 2006-07 is with regards to addition of Rs. 1,08,99,405/-on account of suppression of sales of same. The GP ratio shown during the year was 3.66% on a turn over of Rs. 6.32 crores,....
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....uction ratios between different months was found logically inaccurate and faulty by CIT(A). For example, Assessing Officer herself recorded in chart on page-3 and also observed in subsequent paras that in the month of July, the production WAS 71,294.75 kgs against the consumption of electricity of 15,080 units and that, the production per unit of electricity was 4.73 kgs. In the month of February, the consumption of electricity was 9200 units and the production of 25649.27 kgs resulting in per unit production of 2.79 kgs. It was not unusual. As such, production in the month of February was lesser as compared to the month of July and so was the consumption of electricity. Assessing Officer failed to appreciate the very basic that production could not be consistent in all months. In principle, Assessing Officer accepted the variation to reach the conclusion that monthly variation could not be in excess of 20-30%, her action of reducing the total production figure by 30% to arrive at suppressed sales is devoid of logic. In view of this, CIT(A) was justified in deleting the addition made by Assessing Officer after rejecting the books account. This reasoned factual finding of CIT(A) nee....
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....ssessing Officer asked the assessee to explain as to why the undervaluation of the said property to the extent of Rs. 2,87,570/- should not be treated as unexplained investment in the hands of the assessee. In response to same, the stand of assessee has been that there was no ground to apply the provisions of section 69B of the Act, more so when the amounts expended had been duly recorded in the books of account. Assessing Officer rejected the assessee's contention on the ground that valuation of SVA constituted sufficient material evidence on record leading to the reasonable inference that assessee had invested more amounts in excess of what had been shown in books of account. According to Assessing Officer, SVA adopts a scientific method and due procedure to value properties. So, he added a sum of Rs. 2,82,750/- to the assessee's total income being unexplained investment in said property. 5.1 Matter was carried before First Appellate Authority and having considered the same, CIT(A) has deleted the addition in question. Same has been opposed before us inter alia submitting that CIT(A) was not justified in deleting the addition in question. On other hand, ld. Authorized Repres....
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..... 6. In the result, Revenue's appeal for A.Y.06-07 is dismissed. 7. Now we take ITA No. 2544/Ahd/2009 for A.Y. 2007-08. 7.1 First issue is with regards to addition of Rs. 4,85,000/- made under the provision of Section 68. During assessment proceeding, Assessing Officer raised queries about deposits shown from nine persons, the details of which have been reproduced by the Assessing Officer in para-5.1, pages 3-4 of the assessment order. Assessee furnished certain details. Assessing Officer made disallowance with regards to deposit, being not satisfied and he treated cash deposits made in respective bank accounts creditors totaling Rs. 4,85,000/- as unexplained cash credits, and added the same to assessee's total income, which was deleted by CT(A). u/s 68 of the IT Act. 7.2 Same has been opposed before us on behalf of Revenue inter alia submitting that CIT(A) was not justified in deleting the addition in question. Accordingly, order of CIT(A) be set aside and that of Assessing Officer be restored. On other hand, ld. Authorized Representative supported the order of CIT(A). 7.3 After going through rival submissions and material on record, we find that Assessing Officer is liste....