TaxTMI 
TaxTMI 
2015 (3) TMI 6
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....ferred to as "the Act") for Assessment Year 2006-07 vide his order dated 12.12.2008. 2. First we take up ITA No.133/K/2010 by revenue and CO. No. 20/Kol/2010 by assessee. At the outset, it is seen that this appeal by revenue is barred by limitation by 47 days and revenue has filed condonation petition supported by affidavit. When this fact was confronted to Ld. counsel for the assessee, Shri K. L. Bhowmick, Advocate, he conceded that the delay can be condoned and the appeal can be admitted. In terms of the above, we condone the delay and admit the appeal for hearing. 3. The first issue in this appeal of revenue is against the order of CIT(A) in restricting the addition at Rs. 8,91,445/- as against estimated by AO at Rs. 14,76,464/- an....
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....O during the course of assessment proceedings. The AO during the course of assessment proceedings rejected the book results by invoking the provisions of section 145(3) of the Act and for that detailed reasoning have been given in the assessment order. The CIT(A) also confirmed the action of AO rejecting the book results based on sound reasoning. The assessee has not challenged the rejection of book results and accepted the same as it is. The AO after rejecting the book results considered the total turnover of the assessee at Rs. 1,55,40,533/-, eventually which was enhanced by CIT(A) at Rs. 1,57,84,783/-, as admitted by assessee, and directed the AO to apply gross profit rate in terms of the direction vide para 3.3 as under: "3.3. It may....
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....r disclosed business has been determined by the Assessing Officer at Rs. 3,23,793/-. This would therefore require total working capital of Rs. 12,15,238/- (Rs.3,23,793 x 1,57,84,783 / 42,05,763/-) and therefore additional working capital required for undisclosed portion of business would be Rs. 8,91,445/-. The total additional profit generated from the undisclosed business and confirmed by me from the undisclosed business comes to Rs. 10,49,059/-(Rs.1,57,84,783 - Rs. 42,05,763 x 9.06%). Since the additional profit generated during the year is more than the additional capital requirements during the year and there is evidence that part of the unrecorded purchase have been made on credit, in my opinion no addition is required to be made on th....
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....t the left out of unadjusted profit of Rs. 1,57,641/-. The CIT(A) has allowed telescoping by observing as under: "It is seen from the said letter that it no where mentions that the RIP's have been purchased from funds given as loan. It only mentions that the RIPs have been placed as security against loan. If the margin money for the loan is to be provided by the bank itself then the very purpose of margin money gets defeated. No bank would allow this. The claim of the assessee is therefore not acceptable. The investment is therefore being held to be out of undisclosed income. However, it is seen that the assessee has earned undisclosed income from his business which was not accounted and additional income of Rs. 10,49,059/- generated....
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....Rs. 1,06,676.00 despite the fact that the amounts in question related to regular suppliers of goods proved with copies of accounts." 10. We have heard rival submissions and gone through facts and circumstances of the case. We find that the AO during the course of assessment proceedings treated the sundry creditors to the extent of Rs. 1,06,676/- as non-genuine. As the assessee could not file any details or no explanation was offered in respect to the following creditors, the same were added as non- genuine. "(1) Bishnu Priya Mobile = Rs. 17,840/- (2) Rudra Enterprise = Rs. 18,250/- (3) Neosa Elec (P) Ltd. = Rs. 46,479/- (4) Several Small parties = Rs. 24,107/- Total Rs. 1,06,676/-" ....
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....lowed a sum of Rs. 1,59,762/-. Aggrieved, assessee preferred appeal before CIT(A), who confirmed the action of AO vide para 8 of his appellate order as under: "8 have gone through the appeal order relied by the assessee to justify its claim that addition cannot be made u/s.40A(3) in case assessment has been completed u/s.144. However the fact of the assessee are different from the facts that case. In the case of the assessee it is not a simple case of rejection of books but profits have had to be estimated as part of the business was not disclosed. In effect addition has been made in respect of income which should have been reported by the assessee but was not included by it. Section 40A(3) is a deeming provision where expenses even thou....