TaxTMI 
TaxTMI 
2018 (5) TMI 1968
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....als, therefore, the said appeals are being taken up together for adjudication. ITA. NO. 4876/M/2014:- 2. The assessee has filed the present appeal against the order dated 12.03.2014 passed by the Commissioner of Income Tax (Appeals)-40, Mumbai [hereinafter referred to as the "CIT(A)"] relevant to the assessment year 1998-99. 3. The assessee has raised the following grounds: - "1. On facts and in the circumstances of the case and in law. Id. AO had erred in rejecting the books of account and estimating the appellant's income at 3% of aggregate of purchases and sales. Ld. CIT-A has erred in confirming rejection of books of account and estimating appellant's income at Rs. 25,00,000/-. i.e. at 1,5 %of aggregate of purchase and sal....
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....d in the case of Krishna Filaments Ltd and other cases of that group. It was found that the assessee company was issuing accommodation bills to certain parties including Krishna Filaments Group. Action u/s 133A of the Act was taken and statement of Shri B.B. Joshi was recorded. Enquiry reveals that no transaction resulting in the delivery of goods took place. The assessee nowhere took the delivery and gave the delivery goods though shown as purchased and sold in the books. After recording each and every facts of the case, the books of account of the assessee was rejected and the profit ratio @ 3% was assessed on a sale and purchase. The assessee was not satisfied, the assessee filed an appeal before the CIT(A) who restricted the addition to....
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.... the other hand, the Ld. Department has refuted the said contention. Before going further, we deemed it necessary to advert the finding of the CIT(A) on record.: - "II.I have carefully considered the facts of the case, order of the AO and submissions and contentions of the assesses. The learned AO has not given any basis. or reasons or justification for adopting, brokerage rate of 3% in respect of issue of bogus sale/purchase bills. No comparative cases or instances have been cited by AO. Accordingly, the decision of the AO in adopting brokerage rale of 3% appears to be purely on guess work and estimate basis. In fact, initially, the AO wonted to adopt a brokerage rate of only \%. However, later on, while completing the assessment. ....
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....00/- is confirmed and the remaining amount of Rs,25,00,0007- is confirmed and the remaining amount is directed to be deleted." 6. On appraisal of the above said finding, we nowhere found any cogent and convincing reason to reduce the profit ratio on the sale and purchase @ 1%. The AO has rejected the books of account on seeing the facts and circumstances of the case and assessed the income of the assessee @ 3% on sale and purchase. The CIT(A) reduced the the same @ 1.5% of profit on sale and purchase. No distinguishable material has been produced before us to which it can be assumed that the same is liable to be reduced to the extent of 1% profit on sale and purchase. The assessment has been effected on the basis of the estimation basis by....
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....ntum of purchase/sale bills for Krishna Filament Group companies, in respect of various shares, works out to Rs. 64,65,642/- (purchases) + Rs. 65,20,870/- (sales), totaling to Rs. 129,86,512/-. Thus, the income of the assessee @ 1.5% on this works out to Rs. 1,94,798/- as against the figure of Rs. 3,89,595/-. Thus, the appellant gets a relief of Rs. 1,94,797/- on this account, and this ground of appeal is partly allowed." 8. The AO noticed the assessee's transaction of shares belonging to Krishna Filaments Ltd. and M/s. Krishna Vinyls Ltd. The AO estimated the profit @ 3% on purchase of shares and sales of share. The estimation of 3% by the AO was on the basis of sale and purchase of share of M/s. Satyanand Prasad Finance P. Ltd which was ....