TaxTMI 
TaxTMI 
2016 (7) TMI 508
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....against loss of Rs. 38,90,070/-. Case was selected for scrutiny and thereafter assessment was framed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") vide order dated 19/11/2007 and total income was determined at Rs. 1,00,73,877/- before set off of brought forward loss. Aggrieved by the order of the Assessing Officer(AO), assessee carried the matter before the ld.CIT(A), who vide order dated 13/01/2012 (in Appeal No.CAB-I/150/07-08 ) granted partial relief to the assessee. Aggrieved by the order of ld.CIT(A), assessee is now in appeal before us and has raised following grounds of appeal:- 1. The CIT(Appeals) erred in upholding the contention of ld.AO of alleged non-attendance and non-cooperation from assessee. 2. The CIT(Appeals) erred in upholding addition to the tune of Rs. 33,35,000/- u/s.68 of the Act in respect of Loan taken from Shanti Metals Pvt.Ltd. 3. The CIT(Appeals) erred in upholding action of ld.AO in rejection of books of accounts. 4. The CIT(Appeals) erred in upholding action of ld.AO in estimating Net Profit at Rs. 6,05,998/-, being 1% of Sales. 3. First (second ground of appeal) ground is with resp....
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....ing in Schedule G, i.e. 'sundry debtors' for Rs. 90,94,664/-. However, he could not explain as to how loans received would be reflected as 'sundry debtors' in balance sheet of party. Further, it is a fact that the returned income of Shanti Metals Pvt.Ltd. was Rs. 26,490/- only in A.Y. 2005-06 and despite AO's specific requisition, copy of bank statement of Shanti Metals Pvt.Ltd. showing source of Rs. 33,35,000/- is not filed. Creditworthiness of this party is therefore not established and addition u/s.68 in respect of loan from this party is justified. To sum up, addition of Rs. 60,60,000/- is deleted and addition of Rs. 33,35,000/- is confirmed." 3.2. Aggrieved by the order of the ld.CIT(A), assessee is now in appeal before us. 3.3. Before us, ld.AR reiterated the submissions made before the AO and ld.CIT(A) and further submitted that and addition to the extent of Rs. 33,35,000/- in respect of funds received from Shanti Metals Pvt.Ltd. was confirmed by the ld.CIT(A). He submitted that assessee has furnished the copy of acknowledgement of Income-tax return, confirmation and the annual report of Shanti Metals Pvt.Ltd. and has thus proved the identity, genuineness of transactio....
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....ceived from Shanti Metal Pvt.Ltd. as loan but on the other hand, Shanti Metals Pvt.Ltd. has reflected the amount due from assessee as "Sundry Debtors", assessee had not filed the copy of bank statement of Shanti Metals Pvt.Ltd. showing source of Rs. 33,35,000/-. On the other hand, before us, it is assessee's submission that the assessee had furnished the details to prove the genuineness of transaction and if given one more opportunity, the assessee would present Shanti Metals Pvt.Ltd. before the AO and also furnish all the other necessary details required and also prove that the transactions with Shanti Metals Pvt.Ltd. was genuine and therefore no addition u/s.68 was required. Considering the aforesaid request of the assessee's ld.AR, in the interest of justice, we are of the view that the assessee be granted one more opportunity to prove the transactions. We therefore restore the issue back to the file of AO to decide afresh the issue of addition u/s.68 of the Act with respect to the amount received from Shanti Metals Pvt.Ltd. Needless to state that the AO shall grant adequate opportunity of hearing to the assessee. The assessee is also directed to cooperate by promptly furnishing....
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....edings nor even during appellant proceedings. Such details include details of sales and purchases with addresses of parties, details of assets purchased with bills, details of expenses, justification in respect of payments covered u/s.40A(2) etc. Appellant has also not explained the basis for revising the returned income to NIL from returned loss of Rs. 38,90,070/- after selection of case for by the Assessing Officer, it was not possible for the A.O. to verify whether books of accounts were correct or complete and whether the income returned was correctly computed. Assessing was therefore justified in invoking provisions of section 145(3). As far as appellant's contention regarding there being no basis of addition is concerned, quantum wise, addition made @ 1% of total sales, i.e. Rs. 6,05,998/- is reasonable in the facts and circumstances of the case. In a situation like this, Assessing Officer had no option but to make addition on estimated basis only. Addition of Rs. 6,05,998/- is confirmed." 5.2. Aggrieved by the order of the ld.CIT(A), assessee is now in appeal before us. 5.3. Before us, ld.AR reiterated the submissions made before the AO and ld.CIT(A) and further submit....