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2016 (5) TMI 1257
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....n was taken up for hearing on the consent of both the parties. 3. At the very outset, the learned Authorised Representative submitted a letter dated 19th May 2016, seeking permission to withdraw the appeal and cross objection filed by the assessee. The contents of the said letter are as under:- 19/5/2016 "To Hon'ble ITAT "D" Bench Mumbai Respected Sir, Re: Withdrawal of assessee's appeal and cross objection ITA no.192/Mum./2013 and 78/Mum./2016 Your honours are requested to permit the withdrawal of the assessee's appeal and cross objection. Thanking you, Yours faithfully, Sd/- (Authorised Representative) Prakash Jhunjhunwala M.no.047460" 4. The learned Departmental Representative has no objection for withdrawal of the appeal and the cross objection by the assessee. 5. In view of the aforesaid, we dismiss the cross objection (C.O. no.78/Mum./2015) and appeal by the assessee (ITA no.92/Mum./ 2013) as withdrawn. 6. As far as Revenue's appeal being ITA no.4949/Mum./2012, is concerned, the effective grounds raised are as under:- "1. On the facts and in the circumstances of t....
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.... some other person was carrying on the business by utilising the name of the assessee. In other words, the assessee was a benami of another person. The Assessing Officer, therefore, was of the view that the book results of the assessee cannot be accepted and have to be rejected in terms of section 145(3) and income has to be estimated. The Assessing Officer observed, as per the Profit & Loss account forming part of the tax audit report, the total sales effected by the assessee during the year was Rs. 76,01,11,881. He observed, in spite of such huge volume of turnover, neither there was any opening stock nor closing stock which according to the Assessing Officer indicates that the assessee was used by another person for issuing accommodation bills to various persons. So, on the aforesaid basis, the Assessing Officer proceeded to estimate the profit @ 5% on the total sales disclosed by the assessee and worked out the profit at Rs. 3,85,05,594. Being aggrieved of the addition made on account of estimation of profit, assessee preferred appeal before the first appellate authority. 9. The learned Commissioner (Appeals), after considering the submissions of the assessee vis-a-vis the f....
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.... certain extent, proves that the entries are accommodation bills. He also took note of the fact that in the earlier year also, assessee had disclosed similar sales and purchases and shown profit @ 0.02% to 0.19%. The learned Commissioner (Appeals) also found that the assessee is a man of small means and resides in a chawl. He receives nominal income of Rs. 5,000 per month given by his mentor Shri Ashok Jain. On over all consideration of these facts, the learned Commissioner (Appeals) was of the view that estimation of net profit @ 0.5% would be reasonable. Accordingly, he quantified the addition at Rs. 38,00,559. 11. Learned Departmental Representative submitted, when the assessee was found to be involved in unscrupulous/dishonest activities of providing accommodation bills as a benamidar, the learned Commissioner (Appeals) was not justified in reducing the net profit rate to 0.5% thereby giving a premium to the dishonesty of the assessee. He submitted, though, there is no basis shown by the Assessing Officer while adopting net profit rate of 5% similarly learned Commissioner (Appeals) has also not shown the basis for reducing it to 0.5%. He, therefore, submitted the estimation ....
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....n our view, the estimation of profit @ 0.5% by the learned Commissioner (Appeals) is reasonable, hence, calls for no interference. Accordingly, upholding the order of the learned Commissioner (Appeals) on the issue, we dismiss ground no.1, raised by the Department. 14. Grounds no.2 and 3, raised by the Department are on common issue of deletion of addition of Rs. 8,95,22,222, made on account of unexplained outstanding balance of creditors. 15. Brief facts are, during the assessment proceedings, the Assessing Officer on verifying the balance sheet found that as on 31st March 2009, outstanding balance in respect of four creditors of Mumbai and Surat were shown at Rs. 8,95,22,222. Though, in response to the query raised by the Assessing Officer to prove the creditors, the assessee furnished various details like bank statement, confirmation letters from the creditors, but the Assessing Officer ignoring those evidences treated the outstanding balance appearing in the name of creditors as unexplained cash credit under section 68 of the Act for the reason that identity and creditworthiness of creditors and genuineness of transaction could not be proved by the assessee by producing t....
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....med their transaction with the assessee deleted the addition made by the Assessing Officer. 18. Learned Departmental Representative objecting to the deletion of addition made by the Assessing Officer submitted, in the course of assessment proceedings, the assessee did not produced any evidence to prove the identity and creditworthiness of creditors and genuineness of the transaction, therefore, the Assessing Officer was justified in inferring that the credits are unexplained in terms of section 68. He submitted, learned Commissioner (Appeals) though independently conducted enquiry by issuing notices under section 133(6) and obtained information from the creditors, on the basis of which he deleted the addition, he did not thought it fit to send these evidences on remand to the Assessing Officer for verification and his comment. Therefore, without allowing an opportunity to the Assessing Officer to verify evidences brought on record which were not before the Assessing Officer, the deletion of addition was not proper. He, therefore, submitted that the matter may be restored back to the file of the Assessing Officer for deciding afresh after verifying the evidence brought on record.....
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....ion drawn by the Assessing Officer in Para-4 of the assessment order, the balance appearing in the name of creditors amounting to Rs. 8,95,22,222 was treated as unexplained cash credit under section 68 only for the reason that the creditors were not produced before the Assessing Officer. The Assessing Officer has not pointed out any specific deficiency either in the confirmation letter or any other documents submitted by the assessee before him. As could be seen, in the course proceedings before him, the learned Commissioner (Appeals) to further verify the genuineness of assessee's claim in respect of the creditors issued notices under section 133(6) to all the four creditors seeking various details as noted elsewhere in our order. It is also undisputed that in response to the notice issued under section 133(6) the four creditors again confirmed their transactions with the assessee and the outstanding balance appearing in the books of the assessee. In fact, as per the information obtained by the learned Commissioner (Appeals) in pursuance to notice issued under section 133(6), all of them are income tax assessee with regular PAN and are filing their income tax returns regularly. Ap....
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....g out of the proceedings in which the order appealed against was passed, irrespective of the fact whether such matter was raised before him by the assessee or not. Sub-rule (1), (2) and (3) of rule 46A of the I.T. Rules, puts restriction on the assessee as far as production of additional evidence before the first appellate authority is concerned. It puts a condition that no additional evidence can be admitted without fulfilling the condition of sub-rule (1) and (2). Similarly, sub-rule (3), provides for an opportunity to be granted to the Assessing Officer to examine the additional evidence and offer his comments. However, sub-rule (4) of Rule 46A, makes it clear that the conditions imposed under sub-rule (1)(2)and (3) in respect of furnishing of additional evidence by the assessee would not apply or affect the power of the first appellate authority to direct the production of any document or examination of any witness for enabling him to dispose of the appeal. Thus, sub-rule (4) of rule 46A, r/w Explanation to section 251 makes it clear that Commissioner (Appeals) has unfettered power to conduct enquiry independently for effective disposal of an appeal relating to an assessment or....