2015 (11) TMI 803

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....blished by the A.O. with evidence and material on record? ii) Whether on the facts and in the circumstances of the case, the ITAT was justified in upholding the assessee's argument of "peak credit" without referring it to A.O. for proper examination of books of accounts to arrive at correct working of "peak credit" ? iii) Whether on the facts and in the circumstances of the case, the ITAT was justified in upholding the G.P. Of 6 % on undisclosed purchases whereas the assessee has himself shown a G.P. Of 15% in all the Assessment Years? iv) Whether on the facts and in the circumstances of the case the ITAT examined assessment records and return filed by the assessee to show that the assessing officer is not rig....

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....ribunal. 3. Having heard counsel for both sides and looking to the facts and circumstances of the case, it appears that the batteries were never purchased by the respondentassessee on one time payment, but, it was purchased on credit basis and hence, the amount which has been added in the income of the respondentassessee which is Rs. 12,73,429/- as unexplained investment, could not have been added by the Assessing officer. So far as, rate of net profit is concerned, Gross profit rate fixed by Assessing Officer @ 15 % which has been reduced by the Commissioner (Appeal) as a net profit @ 6 %. This is also correct because the respondent has sold the batteries on a wholesale basis. The percent of the profit is much lessor because the prices ....

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....account of estimation of income earned by the assessee from these undisclosed transactions. We, after careful consideration of the facts and circumstances of the case and the orders of the Ld. CIT(A), find that the huge transactions had taken by the assessee out of the books of accounts and was selling the product keeping a margin of 3.5 to 4.5 % after deducting packing and delivery charges. Since the business of batteries was wholesale business of the assessee, 15% income estimated by the AO is not justifiable. Ld. CIT(A) in appeal has observed that the assessee had incurred other miscellaneous expenditure for running business apart from pacing & delivery. Considering these facts and circumstantial evidence, we are of the view that the dir....