TaxTMI 
TaxTMI 
2015 (12) TMI 900
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....he case and in Law, the Ld.CIT(A) has erred in deleting the addition made on account of suppression of sales by the assessee to the tune of Rs. 23,54,825/- as per impounded Annex.BF-15. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A), has erred in deleting the addition made on account of suppression of sales by the assessee to the tune of Rs. 6,47,300/- as per impounded Annex. BF-4. 3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A), Surat ought to have upheld the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the Ld.CIT(A)-IV, Surat may be set-aside and that of the Assessing Officer's order may be restored. 2. Briefly....
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....re us. 3. Ground Nos.1 & 2 in this appeal are against deletion of addition(s) of Rs. 23,54,825/- and of Rs. 6,47,300/-. The ld.Sr.DR vehemently argued that the ld.CIT(A) was not justified in deleting the addition. He reiterated the submissions as were made in the statement of facts. 3.1. On the contrary, ld.counsel for the assessee supported the order of the ld.CIT(A) and submitted that the assessee derives income from trading activities in furniture, artificial items, tiles and ceilings. A survey action u/s.133A was conducted on 25/02/2008 and partner of the assessee-concern, Shri Keyurbhai disclosed income of Rs. 50 lakhs which has been duly disclosed in the return of income. He submitted that the AO erroneously rejected the book re....
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....25/, whereas disclosure was Rs. 50 lacs and, therefore, addition of Rs. 23,54,825/- has been made. He submitted that another reason for rejection is that copies of sales bill remained unsigned. He submitted that from the above, it would be clear that these cannot be grounds for rejection of books and, therefore, the ld.CIT(A) in para-2.2, pages 4 & 5 held that books cannot be rejected. According to the ld.CIT(A), it has not been shown by the AO that the assessee has wrongly recorded the sale price in the books. The ld.counsel for the assessee submitted that the Department has accepted the above finding of the ldCIT(A) and has not raised any ground of appeal in relation thereto. In fact, once the books cannot be rejected, there cannot be any....
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....out inquiries with the buyers to confirm his suspicion before concluding that the books were defective. As no specific defect has been shown in the books, they could not be rejected. 2.2.1. It has been also argued by the assessee that in the computation for determining the profitability, the A.O. has wrongly adopted a discount rate of only 20% whereas the rates of discount vary and could be as high as 50%. In this regard, the assessee submitted photographs of banners put up at different places in the city. It also argued that the profit margin determined by the A.O. was on a limited sample and without regard to the actual sale price and therefore resulted hi abnormal profit margins. It has also argued that hi his calculations the A....
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....served that this observation leads to suspicion and can be the starting point for investigation but this cannot be the basis for rejecting the books. The A.O. should have carried out inquiries with the buyers to confirm his suspicion before concluding that the books were defective. As no specific defect has been shown in the books, they could not be rejected. We find merit into this contention of the ld.CIT(A) that the AO has not made any enquiry from the buyers to verify the actual sale price. In the absence of the same, in our considered view, the AO was not justified in rejecting the books of account and making the addition. Therefore, we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. Thus, thi....