2018 (5) TMI 429

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.....03.2013 for assessment year 2010-11. The grounds raised by the assessee per its appeal are as under:- "1. For that on the facts and in the circumstances of the case, Ld. CIT(A) was not justified in confirming the addition of Rs. 5,26,350/- made by the AO on account of gross profit, which was wrongly estimated @ 2% of the turnover. 2. For that on the facts and in the circumstances of the case, Ld. CIT(A) was not justified in confirming the addition of Rs. 2,75,000/- made by the AO in respect of capital introduction by wrongly invoking section 68 of the Act. 3. (a) For that on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the addition of 33,87,197/- made by the AO on account of alle....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the market that assessee has gone bankrupt. Therefore all the creditors started demanding their dues suddenly. The landlord also forced the assessee to vacate the shop, go-down instantly. Further the landlord has thrown all books of account so that assessee was unable to produce the same before the AO. However, Ld. CIT(A) disregarded the contention of assessee and confirmed the order of AO by observing as sunder:- "Assessment year in question is 2010-11 and financial year is 2009-10. Assessment was completed on 22.03.2013. Assessee is stating that he was compelling to vacate the shop and godown in the month of April 2010. The appellant / assessee filed return of income tax for the Assessment Year 2010-11 on 05/10/2010 in ITR-5 and ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 2 2009-10 14980376 295197 1.97 3 2010-11 46758142.55 408810.03 0.87 Ld. AR in view of the above, prayed that gross profit ratio declared by assessee should be accepted. On the other hand, Ld. DR for the Revenue vehemently relied on the order of Authorities Below. He left the issue to the discretion of the Bench. 5. We have heard the rival contentions of both the parties and perused the material available on record. It is undisputed fact that assessee failed to furnish the books of account during assessment proceedings. Therefore, in such a situation, only recourse available to the revenue is to estimate the profit but on reasonable basis. There is also no ambiguity that the assessee in the earlier years ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Rs. 2.75 lakh u/s 68 of the Act on account of capital introduction by the partners. 7. The assessee during the year has shown capital contribution of Rs. 2.75 lakh by its partners. The assessee in support of its fresh capital contribution has not provided any documentary evidence. Therefore, the AO was treated as undisclosed income and added to the total income of assessee. 8. Aggrieved assessee preferred an appeal before Ld. CIT(A) who confirmed the order of AO. Being aggrieved by this order of Ld.CIT(A) assessee came in second appeal before us. 9. Ld.AR for the assessee before us submitted that the AO in his order has admitted that the capital was contributed by the partner therefore no addition in the hands of the assessee can b....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... be made then it has to be added in the hands of partner. Therefore we reverse the order of Authorities Below. This ground of appeal assessee is allowed. 11. Next issue raised by assessee in this appeal is that Ld. CIT(A) erred in confirming the order of AO by sustaining the disallowance of Rs. 33,83,197/- on account of non-existence creditors. 12. During the courses of assessment proceedings, AO has presumed that the creditors shown by assessee are non-existence. Accordingly, the creditors were disallowed and added to the total income of the assessee. 13. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who confirmed the order of AO. Being aggrieved by this order of Ld. CIT(A) _assessee is in second appeal before us. 1....