2019 (6) TMI 1423

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.... i. Partial confirmation of addition made u/s 68 of the IT Act, 1961 ii. Partial confirmation of addition made towards gross profit. Besides the above, the assessee has also raised legal ground stating that the reasons for re-opening of the assessment was not supplied to the assessee and further, the details of approval taken for issuing the notice u/s 148 of the IT Act, was not mentioned in the assessment order. 3. The revenue is in appeal challenging the decision of the ld.CIT(A) in deleting the disallowance made by the AO u/s 40A(3) of the IT Act and also not admitting the additional evidence. 4. The facts relating to the case are stated in brief. The assessee is a dealer and commission agent in onions. The retur....

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....AO. In the remand proceedings the AO issued summons to all the 52 farmers, but only 16 persons responded. Based on this report, the ld. CIT(A) granted relief to the tune of Rs. 7.12 lakhs, being the amount outstanding in the name of famers who have responded to the notices issued by the AO. The ld. CIT(A) confirmed the balance amount of addition. 7. We have heard the parties on this issue and perused the record. We notice that the AO has made this addition only for the reason that the assessee has failed to prove the genuineness of credits outstanding in the name of famers, since credit sales by farmers is not an existing trade practice. Even though, an opportunity was provided to the assessee during the appellate proceedings and remand ....

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.....24%. The AO stated in his order that the margin of profit in such trade is around 5%. . Therefore, he estimated the gross profit at 5% of Rs. 3,28,29,099/- and made a resultant addition of Rs. 15,59,468/- is made by the AO. I have examined the position. The AO while estimating 5% GP has not cited any comparable cases which also have more than Rs. 3 Crores turnover. Onions are perishable goods unless the assessee has cold storage facility. Nothing is mentioned about this. The assessee is basically a purchase agent (commission agent) Therefore, his margin of commission being fixed, he can't draw more commission from the actual buyers. Since the assessee has done own trading also, I find that being perishable goods the margin of profit ranges....