AI Drafter 
TaxTMI 
TaxTMI 
2022 (5) TMI 1098
X X X X Extracts X X X X
X X X X Extracts X X X X
....t, 1961 (hereinafter 'the Act') vide orders of even date 31.03.2015 / 30.03.2015 and for the same assessment orders, penalty under dispute was levied u/s.271A / 271B of the Act vide orders of even date 31.08.2015 / 10.09.2015 / 30.09.2015. 2. At the outset, it is noticed that all the appeals of assessees Shri Shanthilal D Jain and Smt. Sharmila S Jain are delayed by 7 days to 138 days. The assessees have filed condonation petitions supported by affidavits for condoning the delay and admitting the appeals. The ld.counsel for the assessee drew our attention to the affidavit filed in one of the appeal in ITA No.429/CHNY/2020 for assessment year 2008-09, wherein one of the assessee Smt. Sharmila S Jain filed affidavit and delay was to the extent of 138 days. In the affidavit, the facts stated is that the order of CIT(A) - 18, Chennai dated 30.07.2009 was received on 06.08.2019. The ld.counsel stated that the appeal should have been filed before the Tribunal within 60 days i.e., on or before 05.10.2019, but appeal was filed only on 20.02.2020 with a delay of 138 days. These are admitted facts and there is no dispute. The ld.counsel for the assessee stated the reasons submitted in par....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essees is that, the assessees in all these appeals, filed return of income prior to the search and there is no proceedings pending and the assessments are unabated and there is no incriminating material found during the course of search conducted by the Department on 22.05.2012 on the residential and business premises of the assessees group of cases. This common issue is raised by assessees in all these 8 appeals and stated that the assessments are unabated and as on the date of search no action or assessment proceedings or any other proceedings were pending before the Income Tax Authorities. 3.2 The ld.counsel for the assessees for this taken up one of the case in ITA No.2357/CHNY/2019 for the assessment year 2007-08 in the case of Shri Shanthilal D Jain and stated that facts are identical in all these 8 appeals of the group. The ld.counsel for the assessees as well as ld. CIT-DR agreed that facts and circumstances are identical in all these 8 appeals and hence, will take up this appeal in the case of Shri Shanthilal D Jain. 3.3 The ld.counsel for the assessee first of all drew our attention to Ground Nos.6 & 7 which reads as under:- 6. For that without prejudice to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-13 -do- -do- -do- -do- 2013-14 -do- -do- -do- 3.5 The ld.counsel for the assessee has filed a chart giving the status of the assessment framed u/s.153A / 153C r.w.s 143(3) of the Act, in regard to unabated assessments which is as under:- S.NO NAME OF ASSESSEE SECTION ITA .NO ASST YEAR STATUS 1. SHANTHILAL D JAIN 153A 2357/2019 2007-08 ROI filed on 19.08.2008-No proceedings pending as on date of search. Hence Unabated 2. SHANTHILAL D JAIN 153A 2358/2019 2008-09 ROI U/s.139(1) filed on 19.08.2008- No proceedings pending as on date of search. Hence Unabated 3. SHANTHILAL D JAIN 153A 2359/2019 2009-10 ROI U/s.139(1) filed on 02.09.2009-No proceedings pending as on date of search. Hence Unabated 4. SHANTHILAL D JAIN 153A 2360/2019 2010-11 ROI U/s.139(1) filed on 08.10.2010-No proceedings pending as on date of search. Hence Unabated 5. SHARMILA S JAIN 153C 431/2020 2010-11 ROI U/s.139(1) filed on 04.10.2010-No proceedings pending as on date of search. Hence Unabated....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d filed with the AO. Nevertheless digital evidence have been recovered during the search which fact has not been maintained and such materials have been factored by the AO while making assessment u/s 153A. The appellant's objections and grounds are thus untenable and are liable to the dismissed." Aggrieved assessee came in appeal before the Tribunal. 3.7 Before us, the ld.counsel for the assessee stated that as per details given in chart, returns of income were filed for the respective assessment years on due dates and search was conducted on the residential and business premises of the assessee on 22.05.2012. The ld.counsel stated that there is no incriminating material found during the course of search relating to these assessment years, where assessment is unabated, means no action is pending against a valid return of income filed u/s.139(1) of the Act. The ld.counsel stated that once there is no incriminating material, there is no scope for the AO to assume jurisdiction u/s.153A / 153C of the Act and reopen the assessment in view of the decision of Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation (Nhavasheva) Ltd., (2015) 374 ITR 645. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee before either of the authorities and even now before us. We noted that the AO has brought on record adequate material that the assessee has not maintained books of account in term of section 44AA of the Act and has not got them audited u/s.44AB of the Act and filed with the AO. We noted that this is uncontroverted claim that the hard disk contains incriminating material having bearing on the determination of income on account of unaccounted indirect expenditure, peak cash credits, sundry loan creditors added u/s.68 of the Act, bogus purchases and unexplained investment in property. We find that this is a common feature in all the assessees cases and once this is the fact, we noted that the AO has rightly assumed jurisdiction u/s.153A or 153C of the Act in the above mentioned cases for the above 8 appeals. Hence, this common issue in all these appeals of assessee is dismissed. 4. Now, let us take the following 17 appeals :- Sl. No. ITA Nos. Assessment Years Assessee 1 2357/CHNY/2019 2007-08 Shri Shanthilal D. Jain 2 2358/CHNY/2019 2008-09 3 2359/CHNY/2019 2009-10 4 2360/CHNY/2019 2010-11 5 2361/CHNY/2019 2011-12 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer ought to have accepted the indirect expenditure claimed by the appellant. 9. For that the Commissioner of Income Tax (Appeals) erred in disallowing 10% of the indirect expenditure, that too on an arbitrary basis, disregarding the fact that the accounts of the appellant are duly audited u/s.44AB of the Income Tax Act, 1961" 5.1 Brief facts are that the assessee is a proprietor of M/s. Shree Dharma Battery and Shree Battery House and also partner in the partnership firm M/s. Shree and M/s. Shreyans Power with the proprietorship of Smt. Sharmila, assessee's wife and Smt. Prema Devi, assessee's mother. The assessee admitted in the statements recorded and noticed from the entire affairs of the entities controlled and managed by the assessee, it seems that these concerns did not maintain any separate books of account for each entity but only maintains sales and purchase registers in tally. The AO during the course of assessment proceedings required the assessee to produce books of account but assessee was able to produce only incomplete books of account and that also there was inconsistency in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reshold. In this case, as observed earlier, the appellant had not maintained regular and contemporaneous books of account supported by documents, vouchers that are capable of being verified. 10.3.2 In the appellant's case, he did not produce any bills or vouchers for verification nor maintained any books of account to verify the said expenditure in order to substantiate his claim of expenditure. In the circumstances, the AO necessarily will have to make a reasonable and intelligent estimate by way of disallowance of expenditure in order to determine the true and correct income of the appellant. The only caveat is that, it is not open to the AO to make unreasonable and excessive disallowance without basis on material and without having nexus to trade practices. 10.3.3 Viewed from the provisions of law, defence advanced by the appellant, the prevalent trade practice and the nature of trade, the disallowance of 25% of expenditure claimed cannot be considered as reasonable and is not found to be justified, especially when no concrete adverse material to justify disallowance of this magnitude has been brought on record by the AO. 10.4 On appraisal of the facts....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o addition made by AO and confirmed by CIT(A) in regard to incentives received by assessee in assessment years 2007-08 to 2010-11 in ITA Nos.2357 to 2360/Chny/2019. The facts and circumstances in all these appeals are exactly identical and the grounds raised are identical and hence, we will adjudicate this issue in ITA No.2357/Chny/2019 for the assessment year 2007-08 in the case of Shri Shanthilal D. Jain. For this, assessee has raised following Ground No.10:- 10. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the incentives received by the appellant ought not to have been added by the Assessing Officer. Incentives received were always duly accounted by the appellant in his books of accounts. 6.1 The AO noted that the assessee is the proprietor of M/s. Shree Battery House engaged in the trade of batteries and inverters. The assessee was purchasing batteries from M/s. Exide Industries but assessee was not maintaining any books of accounts. Accordingly, the AO called for the ledger account of the assessee in the books of M/s. Exide Industries. After verification of ledger account of the assessee in the books of M/s. Exide Industries, the AO n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not made any argument in regard to the merits of the case, whereas the ld.CIT-DR relied on the order of CIT(A). Once the assessee has not maintained any books of account nor any bills and vouchers and despite number of opportunities given to him to produce the accounts, he could not do so and hence, we have no alternative except to confirm the findings of the CIT(A). The issue in this appeal of assessee in regard to addition of incentive is confirmed. This common issue in all these appeals of assessee in ITA Nos.2357 to 2360/Chny/2019 for assessment years 2007-08 to 2010-11 is dismissed. 7. The next common issue in these appeals of assessee is as regards to addition made by the AO and confirmed by CIT(A) to peak cash credit of bank statement as unexplained cash credits for assessment years 2007-08 to 2012-13 in ITA Nos.2357 to 2362/Chny/2019. The facts and circumstances in all these appeals are exactly identical and the grounds raised are identical and hence, we will adjudicate this issue in ITA No.2357/Chny/2019 for the assessment year 2007-08 in the case of Shri Shanthilal D. Jain. For this assessee has raised following Ground Nos.13 & 14:- 13. For that the Commission....
X X X X Extracts X X X X
X X X X Extracts X X X X
....much less than the turn over. The appellant further went on to say that the appellant is a wholesale dealer and hence there is negligible scope to deal in cash. The appellant has made only grand and ideal statements without adducing any evidence in respect of the material issues and arguments. The appellant could not demonstrate that all deposits were not in cash. The AO's inference and conclusion on this point has not been repudiated even before the undersigned. In the light of his failure, that the sales turnover is more than the impugned deposits does not hold water. The appellant is under an obligation to explain the credits- regardless of cash and cheque transactions. The onus is on the appellant and is more stringent when the impugned credits are by way of cash. 12.3.1. The appellant's shelter that bank statement cannot be treated as books of accounts does not absolve him of the responsibility to discharge his onus as he has stated to have maintained purchase and sales accounts; and if the appellant's argument that the impugned deposits are part of turnover were to be true, it is all the more incumbent on him to explain the entries to the satisfaction of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Once there is no books of account, how the assessee can make a claim that the cash deposits are arising out of sale proceeds or he could not link the same with the sales made by producing any evidence. In such circumstances, we have no alternative except to confirm the addition. This issue of assessee's appeal is dismissed. Similar are the facts in other appeals for assessment years 2008-09 to 2012-13 and hence, this decision will apply in all those appeals. 8. The next issue i.e., addition on account of transfer from personal books amounting to Rs.1,50,000/- from M/s. Shantilal D. Jain HUF and loan of Rs.6,00,000/- from Late Shri Dharmichand Jain invested in M/s. Shree Battery House for assessment year 2007-08 in ITA Nos. 2357/Chny/2019 and the relevant ground raised reads as under:- 11. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the source of investment in M/s. Shree Battery House to the extent of Rs.1,50,000/- is the borrowing made by the appellant from M/s. Shantilal D Jain HUF. The Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer in treating the said sum as unaccounted income. 8.1 Brief....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s) failed to appreciate that the Assessing Officer ought to have added the borrowing made by the appellant from his father Late Shri Dharmichand Jain to the extent of Rs.6,00,000/- as unexplained cash credit u/s.68. The provisions of section 68 cannot be invoked in the facts and circumstances of the case. 9.1 Brief facts are that the AO during the course of assessment proceedings noted that the assessee has borrowed a sum of Rs.6 lakhs from Shri Dharmichand Jain but could not produce the details and could not explain the source, creditworthiness and identity of the party and therefore, made addition. Even the CIT(A) confirmed the action of AO by observing in para 16.3 as under:- "16.3 I have perused the materials and noticed that the appellant has not discharged his onus as to the cumulative satisfaction of identity, creditworthiness and genuineness of the impugned credit. Even in the records of Dharmichand, details as to the identity of the debtors are not available. In view of the appellant's failure to discharge initial burden of proof, the AO's action is upheld. The appellant's ground is dismissed." 9.2 We noted that this amount of Rs.6 lakhs from Shri Dharmichan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent years are identical and hence, we will take the facts from the assessment year 2008-09 and will decide the issue. For this, assessee has raised following Ground Nos. 11 & 12 in assessment year 2008-09 in ITA No.2358/Chny/2019. 11. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the profit margin on sale of old batteries were always in the range of 0.5% to 1%. 12. For that the Commissioner of Income Tax (Appeals) erred in holding that the appellant earned 10% profit on sale of old batteries, that too on an arbitrary basis. 11.1 Brief facts are that the AO noted from the hard disk seized during the course of search that there are unverifiable purchases of scrap of batteries by the assessee and accordingly, the AO worked out the profit margin @ 30% in assessment year 2008-09, 37% in assessment year 2009-10 and 27 % in assessment year 2010-11 and made addition of trading in scrap as under:- A.Y. 2008-09 Rs.1.59,923/- A.Y. 2009-10 Rs.3,95,885/- A.Y. 2010-11 Rs.18,47,211/- The assessee before AO contended that the profit margin on sale of old batteries is in the range of 0.5% to 1% and accordingly the estimate shou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ax (Appeals) failed to appreciate that the Assessing Officer ought not to have considered the gifts received by the appellant from his relatives as unexplained investment / unexplained credit. 14. For that the Commissioner of Income Tax (Appeals) failed to appreciate that gifts received from relatives is exempt from taxation. The Commissioner of Income Tax (Appeals) erred in disregarding the gift deeds produced by the appellant. 12.1 Brief facts are that the assessee purchased two properties for a total consideration of Rs.11.35 lakhs. The AO noted that the investment made in these properties is out of alleged gift receipt of Rs.8.50 lakhs from Shri Nemichand Jain and Rs.2.85 lakhs from Smt. Kanta Devi being the relatives of the assessee. The AO required the assessee to explain the sources of persons who gifted the amount and also evidences to prove the creditworthiness of the donor, genuineness of transaction and the identity of the donors. The assessee failed to explain and hence, the AO treated the entire unexplained investment or gift received from relatives as unexplained credit and added to the returned income of the assessee. Aggrieved, assessee preferred appeal ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny/2019 and will decide the issue. The ground raised by assessee reads as under:- 10. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer ought not to have added Rs.15,78,600/- as unexplained cash credit u/s.68. The provisions of section 68 cannot be invoked in the facts and circumstances of the case. 13.1 The AO in assessment year 2007-08 added a sum of Rs.6,00,000/-, in 2011-12 added a sum of Rs.15,78,600/-, in assessment year 2012-13 added Rs.13,50,000/- and in assessment year 2013-14 added Rs.37,00,000/- as unexplained cash credit. The assessee explained before the AO that the assessee claimed to have borrowed total amount of Rs.25.50 lakhs from Shri Dharmichand and others and the AO has accepted the loan from Shri Dharmichand amounting to Rs.10.50 lakhs and balance Rs.15,50 lakhs was added in the absence of any evidence in regard to identity of the party, creditworthiness and genuineness of transaction in term of section 68 of the Act. Aggrieved, assessee preferred appeal before CIT(A). The CIT(A) restricted the addition at Rs.13 lakhs by observing in para 16.6 as under:- 16.6. I have gone through the facts of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ansaction. In case these three basic ingredients have been proved then only the onus would have been treated as discharged whereas in the present case, the cumulative satisfaction of all three limbs has not established. The AO is right in bringing Rs.37,00,000/- to tax. 16.12.1. Similarly, in the case of credit purported to have been received during the year from Shantilal (HUF) amounting to Rs. 12,00,000/-, the appellant has not produced any evidence as to the genuineness and creditworthiness of the impugned transaction. Hence, The AO's action is tenable and is hence upheld. 16.12.2. In view of this finding, it is only corollary that the interest on such credits that have been upheld as -non-genuine is to be disallowed and added to the total income, which the AO has done. 16.12.3. In view of the foregoing discussion, the appellant's ground is dismissed. Aggrieved in all the three years, assessee came in appeal before the Tribunal. 13.3 We have heard rival contentions and gone through facts and circumstances of the case. Before us, ld.counsel for the assessee has not argued anything on merits. We noted that the ld.CIT(A) has very reasonably ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed u/s.44AB of the Income Tax Act, 1961" 15.1 At the outset, it is noticed that this issue also arose in the 7 appeals of Shri Shanthilal D Jain and the same was dealt by the Bench and the order of CIT(A) restricting the disallowance at 50% of the amount disallowed by AO. The AO made disallowance at 25% of expenditure in all the assessment years and the CIT(A) restricted further 50% of the amount disallowed by the AO by observing in para 10.4 as under:- 10.4 On appraisal of the facts of the case, materials on record and the basis of the observations made supra on the impugned addition, I am of the view that the restriction of disallowance to 50% of the amount disallowed by the AO for the respective AYs under consideration would meet the ends of justice. Thus, the AO is directed to restrict the disallowance accordingly. Therefore, the appellant gets partial relief and the appellant's grounds on this issue are partly allowed. We noted that we have already dealt with this issue in para 5.4 of this order and taking a consistent view, we confirm the order of CIT(A) restricting the disallowance to 50% of the amount disallowed by the AO in the respective assessment years. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ries from M/s Exide Industries. But these incentives were not accounted for in his books. Instead, M/s Exide Industries adjusted these incentives against the scrap sold by the appellant. Further, the Exide Industries have received payments from the assessee only after adjusting the incentives and scrap values. Therefore, as the assessee did not account these incentives as his income, the same was calculated from the ledger account submitted by M/s Exide Industries and brought to tax. Therefore, in the absence of books of accounts, the AO did not find any alternate except to add the incentives. The appellant could not demonstrate that he had offered the incentives correctly to tax by adducing evidence even before the undersigned. In view of the appellant's failure, I hold that the AO's action on this issue is in order. The appellant's ground is dismissed. Even now before us, the ld.counsel for the assessee has not made any argument or not produced any evidences for deletion of addition of incentives received by assessee. We noted that this very issue, we have adjudicated vide para 6.2 above and taking a consistent view, we dismiss this issue in assessee's appeals also for all the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perative to keep in view the business model of the appellant and that majority of its sale of old batteries [treated as scrap] is to M/s Exide. Yet, the profit element could not be brushed aside. After considering the totality of the facts and circumstances of the case, I am of the view that restriction of profit margin to the extent of 50% of the addition effected by the AO for the respective impugned years would meet the ends of justice. The appellant's ground is partly allowed. We noted that the Tribunal has estimated the profit rate for all the years at 10% in the case of Shri Shanthilal D Jain at para 10.1 & 10.2 supra, and hence taking a consistent view, we restrict the profit rate @ 10% for all the years and direct the AO accordingly. Hence, this common issue in these 4 appeals of assessee is partly allowed as indicated above. 18. The next issue in these 4 appeals of assessee in ITA Nos.2587 to 2590/CHNY/2019 for assessment years 2010-11 to 2013-14 is against the order of CIT(A) confirming the action of AO in making addition of peak credit balance for all these years. For this, assessee has raised the following Ground Nos.12 & 13:- 13. For that the Commiss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n view of the failure on the part of the appellant and keeping in view the facts narrated above and hi absence of any supporting corroborative evidences, the A.O. was justified in making addition of peak cash credit of. Rs.7,34,400/-, Rs.3,73,800/-, Rs.10,00,000/- and Rs.39,43,450/- for AYs. 2010 to 2013-14. Accordingly, the order of the A.O. is confirmed on this ground. The appellant's ground is dismissed. 18.2 Even now before us, the assessee could not make any submission or could not produce any evidence to explain that these cash deposit in South Indian Bank during these 4 years is out of sale proceeds of battery. The addition made in each of the year is as under:- A.Y.2010-11 Rs.7,34,400 A.Y.2011-12 Rs.3,73,800 A.Y.2012-13 Rs.10,00,000 A.Y.2013-14 Rs.39,43,450 As the assessee could not produce anything before us, we find no infirmity in the order of CIT(A) and hence, this common issue for all the 4 assessment years of assessee's appeals is dismissed. 19. In above para No.4, in all there are 17 appeals, and now, we will take up 6 appeals of Smt. Sharmila S. Jain in ITA Nos.429 to 434/Chny/2020 (Sl.Nos. 12-17), the assessee has raised various....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urther 50% of the amount disallowed by the AO by observing in para 10.4 as under:- 10.4 On appraisal of the facts of the case, materials on record and the basis of the observations made supra on the impugned addition, I am of the view that the restriction of disallowance to 50% of the amount disallowed by the AO for the respective AYs under consideration would meet the ends of justice. Thus, the AO is directed to restrict the disallowance accordingly. Therefore, the appellant gets partial relief and the appellant's grounds on this issue are partly allowed. We noted that we have already dealt with this issue in para 5.4 of this order and taking a consistent view, we confirm the order of CIT(A) restricting the disallowance to 50% of the amount disallowed by the AO in the respective assessment years. This issue of assessee's appeals in ITA Nos.429 to 434/Chny/2020 is dismissed. 21. The next common issue in these appeals of assessee in ITA Nos.430 to 434/CHNY/2020 for assessment years 2009-10 to 2013- 14 is as regards to the order of CIT(A) confirming the action of AO in disallowing incentives and adding the same to returned income of the assessee. The facts and circumst....
X X X X Extracts X X X X
X X X X Extracts X X X X
....after adjusting the incentives and scrap values. Therefore, as the assessee did not account these incentives as his income, the same was calculated from the ledger account submitted by M/s Exide Industries and brought to tax. Therefore, in the absence of books of accounts, the AO did not find any alternate except to add the incentives. The appellant could not demonstrate that he had offered the incentives correctly to tax by adducing evidence even before the undersigned. In view of the appellant's failure, I hold that the AO's action on this issue is in order. The appellant's ground is dismissed. Even now before us, the ld.counsel for the assessee has not made any argument or not produced any evidences for deletion of addition of incentives received by assessee. We noted that this very issue, we have adjudicated vide para 6.2 above and taking a consistent view, we dismiss this issue in assessee's appeals also for all these 5 assessment years i.e., 2009-10 to 2013-14. This common issue of assessee's appeals is dismissed. 22. The next common issue in these 4 appeals of assessee in ITA Nos.429, 430, 432 & 434/Chny/2020 for assessment years 2008- 09, 2009-10, 2011-12 & 2013-14 is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e A.O. or before the undersigned. The appellant has not demonstrated that the cash deposits have been included in the sale receipts by reconciling the entries in the bank account. The appellant has not brought any explanation with reference to the accounts which in any case she had not maintained completely except saying that he has included the cash deposits in her accounts. 12.4. In view of the foregoing discussions, the A.O. was justified in making addition of peak cash credit of. Rs.743,66,700/- for A.Y.2008-09, Rs.12,02,130 for A.Y. 2011-12 and Rs.54,86,640 for A.Y. 2013-14. Accordingly, the order of the A.O. is confirmed on this ground. The appellant's ground is dismissed. 22.2 Even now before us, the assessee could not make any submission or could not produce any evidence to explain that these cash deposit in South Indian Bank during these 4 years is out of sale proceeds of battery. The addition made in each of the year is as under:- A.Y.2008-09 43,66,700 A.Y.2009-10 8,50,321 A.Y.2011-12 12,02,130 A.Y.2013-14 54,86,640 As the assessee could not produce anything before us, we find no infirmity in the order of CIT(A) and hence, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rial reasons for adopting this uniform rate of 30%. It is imperative to keep in view the business model of the appellant and that majority of its sale of old batteries [treated as scrap] is to M/s Exide. Yet, the profit element could not be brushed aside. After considering the totality of the facts and circumstances of the case, I am of the view that restriction of addition to 50% of the addition made by the AO towards profit from trading and scrap would meet the ends of justice. The appellant's ground is partly allowed. We noted that the Tribunal has estimated the profit rate for all the years at 10% in the case of Shri Shanthilal D Jain at para 10.1 & 10.2 supra, and hence taking a consistent view, we restrict the profit rate @ 10% and direct the AO accordingly. Hence, this common issue in these 4 appeals of assessee in ITA Nos.431 to 434/Chny/2020 is partly allowed as indicated above. 24. The next common issue in these two appeals of assessee in ITA Nos. 429 & 430/Chny/2019 for assessment years 2008-09 & 2009-10 is as regards to the order of CIT(A) confirming the action of AO in making addition of sources of investment in M/s.Shree Battery House as unexplained credit a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....10 lakhs is explained. As the assessee could not provide the details and even now on a special query, the assessee could not explain sources of this Rs.10 lakhs and even no evidences qua, was produced before us and no argument was made by ld.counsel for the assessee. Therefore, we have no alternative except to confirm the action of lower authorities. This issue of assessee's appeal in ITA No.429/Chny/2020 is dismissed. 24.3 As regard to the addition of transfer of Rs.54,02,472/- in assessment year 2009-10, the facts are identical as in assessment year 2008-09, the CIT(A) has already allowed this ground by observing in para 22.3 as under:- "22.3 The appellant has transferred Rs.54,02,472/- from her personal books to M/s. Shree, the appellant's proprietary concern. The appellant had credited Rs.12 lakhs and Rs.40 lakhs during F.Y. 2008-09 and Rs.8 lakhs during F.Y. 2009-10 in her personal books. In view of her failure to prove the credit, the sum of Rs.10 lakhs [represented by cash credits], Rs.40 lakhs [represented by sundry credits] for A.Y. 2008-09 and a further sum of Rs. 8 lakhs [represented by accretion of cash credits] for A.Y. 2009-10 have been treated by the unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T(A). The CIT(A) noted that the assessee has not given any details and hence, he confirmed the action of AO by observing in para 20.3 as under:- "20.3 I have gone through the facts of the case and material available on record. The appellant did not produce any evidence relating to the identity, credit worthiness of the impugned loan creditor before the AO. It is relevant to mention that the appellant could not and did not produce any evidence on the subject matter even before the undersigned. In view of the appellant's failure, I am of the view that the addition representing the credit of Rs.40,00,000 and consequently, the disallowance of interest claimed on such bogus credit of Rs.5,52,182/- deserve to be upheld. The appellant's ground is dismissed." 25.2 Similarly in assessment year 2009-10, the assessee introduced a further sundry creditor loan of Rs.8 lakhs apart from earlier Rs.40 lakhs and also claimed consequential interest of Rs.1,40,850/-. The CIT(A) deleted the addition of Rs.40 lakhs already made in assessment year 2008-09 but confirmed the addition of Rs.8 lakhs and consequential interest of Rs.1,40,850/- by observing in para 21.3 as under:- "21.3 I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vinced and disallowed a sum of Rs.27,72,435/-as inflation of purchases. Aggrieved assessee preferred appeal before CIT(A). Before CIT(A), the assessee did not furnish any evidence and hence, he confirmed the action of AO by observing in para 23.3 as under:- "23.3 The appellant has not furnished any evidence in support of her claim during the course of appeal proceedings. Hence, I am of the view that there is no infirmity in the action of the AO. The appellant's ground is dismissed." Aggrieved now assessee is in appeal before the Tribunal. 26.2 We have heard rival contentions and gone through the facts and circumstances of the case. Even now before us despite a specific query to explain the inflation of purchases of Rs.27,72,435/- the assessee could not file any explanation or evidences. Even the ld.counsel for the assessee could not make any argument. Hence, we confirm the action of the CIT(A). This issue of assessee's appeal is dismissed. 27. Now, we will deal with the following 17 appeals:- S.NO ITA Nos. ASST YEAR NAME OF ASSESSEE 1. 2389/CHNY/2019 2007-08 SHANTHILAL D JAIN 2. 2390/CHNY/2019 2008-09 3. 2391/CHNY/2019 200....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shold shall keep and maintain such books of account and other documents as may enable the AO to compute his total income in accordance with the provisions of this Act. It is hi undisputed fact that the appellant's turnover in the AYs under consideration is in excess of the prescribed threshold. It is not in dispute that search was conducted in the appellant's and during course of search proceedings it has been admitted by the appellant that he had not maintained regular books of account and he had maintained only purchase and sales ledgers. The AO has brought on record the averments made by the appellant to this effect. It is further pertinent to note that that the AO has stated that the appellant could not produce any accounts in support of various claims including that of indirect expenditure. It is further relevant to observe that the fact that the appellant was not maintaining the books of account and that statement was not denied and retracted. On perusal of records, it is clear that the AO could not fully deduce the true and correct income of the appellant except by resorting to disallowance on the basis of certain heuristics with reference to the expenditure booked a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted penalty proceedings for failure to maintain books of account of the appellant's business. Inadvertent mistake of the AO is a curable defect as the appellant very well knows that the turnover of his business is well above the threshold limit and is under clear obligation to maintain books of account. The appellant's hyper technical argument deserves to be rejected and hence the same is rejected. 7.4. It is settled position of law that the onus to prove that there is reasonable cause in terms of S273B of the Act is on the appellant. The appellant has failed to discharge his onus. As discussed above, there is default on the part of the appellant in complying with the provisions of Sec. 271A to be read in an integrated manner with Sec. 44 AA of the Act. 7.5 In view of the above remarks, I am of the opinion that the appellant has defaulted in terms of S271A of the Act and consequently no interference in the AO's action of levy of penalty of Rs 25000 u/s 271A of the Act for each of the AYs under consideration is called for. The view of the undersigned is fortified by the decision of the Hon'ble High Court of Jharkhand in the case of A One Batteries (P) L....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... confirmed the same. Aggrieved, now assessees are in appeal before the Tribunal. 28.2 Before us, ld.counsel for the assessee made only one statement that the Hon'ble Allahabad High Court in the case of CIT vs. S.K. Gupta & Co., (2010) 322 ITR 86, Hon'ble Madhya Pradesh High Court in the case of Bharat Construction Co. vs. ITO, (1999) 153 CTR 414 and Hon'ble Gauhati High Court in the case of Surajmal Parsuram Todi vs. CIT, (1996) 222 ITR 691 has categorically held that once books of account are not maintained and consequently penalty u/s.271A of the Act is levied and confirmed, no penalty u/s.271B of the Act for failure to get the accounts audited u/s.44AB of the Act be levied. The Hon'ble Gauhati High Court in the case of Surajmal Parsuram Todi, supra, held as under:- We have gone through the provisions of ss. 44AA, 44AB, 271A and 271B of the Act. Maintenance of accounts is envisaged under s. 44AA and on failure to do so the assessee shall be guilty and liable to be penalised under s. 271A. Even after maintenance of books of account the obligation of the assessee does not come to an end. He is required to do something more, i.e., by getting the books of account audited ....