TaxTMI 
TaxTMI 
2020 (6) TMI 41
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....against the clubbing of income u/s 56(2)(vii)(b) read with section 64(1A) of the I.T. Act, 1961. 3. That the appellant reserves the right to amend, alter or add to any ground(s) of appeal before or at the time of hearing of the appeal. 3. Ground no. 1 raised by the Revenue relates to addition of Rs. 2,24,79,975/- on account of unexplained cash credit u/s 68 of the Act. 4. Brief facts qua the issue are that on perusal of audited Balance Sheet as at 3103-2014 it was noted by assessing officer that the assessee had shown sundry creditors of Rs. 2,24,79,975/-. The assessee was asked to furnish details of such creditors. In reply, the assessee furnished list of 38 sundry creditors along with total purchases with incomplete addresses. Being asked, the assessee again furnished list of creditors along with purchases with addresses. The Letters were sent by AO to the sundry creditors at the given addresses calling for information u/s.133(6) of the I.T. Act, 1961 but the letters returned un-served with postal remarks 'not known'/'no such person'/insufficient address'/ 'wrong address' etc. The matter was brought to the notice of the assessee and asked to establish ident....
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....17.68 lakh (approx) supplied to the assessee and there was no outstanding balance as on 31.03.2014. But the assessee claimed to have purchased from Shri Khamaru jute amounting to Rs. 21,12,300/- and outstanding balance as on 31/03/2014 is Rs. 8,62,300/- 5. Above mentioned discrepancies were also brought to the notice of the assessee during the assessment proceedings by the AO vide his office letter dated 02/11/2016, which is as under: "During the course of hearing in respect of the above proceedings you have furnished 'list of (38) sundry creditors' including total purchase (63 Nos.) in response to this office notice U/s. 142(1) dt.3l/05/2016. As per given addresses of the sundry creditors, letters were issued calling for information u/s. 133(6) of the I.T. Act, 1961regarding genuineness of purchase as well as sundry creditors. Also summons u/s. 131 were issued to ten (10) creditors but all the letters and summons returned un-served with postal remarks either 'insufficient address' or 'no trace' or 'wrong address' or 'not known'. The matter was brought to the notice of the Authorized Representative over telephone and asked to produce the sundry creditors....
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....ollowing: "I have gone through the assessment order, written submissions and paper book containing page 1 to 93 filed by the A/R of the appellant. I find that the appellant is engaged in the business of trading of raw jute. Most of the purchases are from farmers. I find that in course of assessment proceedings, the A.O. has obtained details of such creditors from the appellant. AO issued notices u/s 133(6) as well as summons u/s 131 of the Act to few parties. In course of examination, AO has stated in para 3(a) and (b) of the assessment order that few dispositions were recorded by him wherein discrepancies in respect of purchases made by the appellant were found. In some cases, names were also different. After pointing out the discrepancies the AO considered entire purchase creditors amounting to Rs. 2,24,79,975/- as bogus and non-genuine. It was stated by the A/R of the appellant that the appellant had produced entire documents relating to purchase and sales, stock etc before the AO. A/R also stated that entire stock register which is also part of paper book was before the AO from examination of such stock register. It can be seen that there is complete tally of opening s....
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....owing the ratio of judgment of Gujarat High Court as well as the other authorities cited, I am of the view that only the profit embedded in such transaction can be brought to tax. I find that this is a case where accounts cannot be said to be correct and complete. Thus only option available to me is to estimate the income by rejecting books of accounts of the appellant. I find that the turnover of the appellant is properly verifiable & the payment are also received through a/c payee cheques thus the estimation of net profit is the best way to determine the income of the appellant. From the details of turnover and net profit rates furnished by the appellant I find that net profit rates are as follows: A.Y.2012-13 A.Y.2013-14 A.Y.2014-15 Turnover 5,39,77,391 11,39,30,152 11,38,38,599 Net profit/Turnover 0.011% 0.37% 0.35% I find that although the net profit rate is almost comparable with last years net profit, but since the admitted position is that certain discrepancies were detected in course of scrutiny assessment u/s 143(3) & therefore a larger disallowances is attracted. Considering the extent of incorrectness, I am of....
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....has been credited in the profit and loss account. The entire sales ofRs. 11,38,38,599/- has been accepted by the AO. We note that only the profit embedded in such transaction can be brought to tax. Therefore,ld CIT(A) has rightly rejected books of accounts of the assessee and made estimate 1% of net profit taking into account past net profit history of the assessee. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A). 11. Ground no. 2 raised by the revenue relates to addition of Rs. 9,15,436/- made by the Assessing Officer against the clubbing of income u/s 56(2)(vii)(b) read with Section 64(1A) of the Act. 12. Brief facts qua the issue are that during the scrutiny assessment, the AO noticed that stamp value (market value) of the property (Flat measuring 1453 Sq. ft. on the fifth floor under Dag No.3782, Khatian No.1229, JL No.27, PO & Mouza - Rishra, Hooghly) was Rs. 26,15,436/- and consideration paid by Sri Ratanlal Dugar was to the tune of Rs. 17,00,000/-. Therefore, AO made addition(stamp value in excess of consideration price) of Rs. 9,15,436/(Rs. 26,15,436 - Rs. 17,00,000), und....