TaxTMI 
TaxTMI 
2022 (11) TMI 354
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....plying flat rate, as such erred in both facts and laws. 3. That the AO has totally overlooked the facts and circumstances of the case and resorted to bald addition. 4. That the appellant craves leave to add/amend any ground of appeal at the time of hearing." 3. Ground of appeal in ITA No. 607/Asr/2018 "1. The ld. CIT(A) erred in both facts and laws by confirming addition of Rs. 5,72,590.00 u/s. 68 of the Income Tax Act, 1961. 2. That the AO has totally overlooked the facts and circumstances of the case and resorted to bald addition. 3. That the appellant craves leave to add/amend any ground of appeal at the time of hearing." ITA No. 606/Asr/2018 (Assessment Year 2009-10): 4. Briefly, the facts in respect of Assessment Year 2009-10 are that the assessee is individual and filed its ITR declaring income of Rs. 6,50,372.00/- against Gross Sales of Rs. 1,18,24,952.00/- and thus, declared Net profit rate of 5.5%. During scrutiny proceedings, the appellate produced books of account and provided details required by the AO. However, the Ld. AO by rejecting book results, applied net profit rate of 10% relying on the judgment delivered by Hon'ble Punjab & Haryana High Court i....
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.... be upheld and the Ld. CIT(A) applied net profit rate of 8% without any logical basis. It is submitted, that Ld. CIT(A) has also committed the same mistake by not considering the past history of assessee or any comparable case rather in an arbitrary manner applied Net profit of 8% without any logical basis. It is submitted, that the past performance of the assessee is reproduced as: Assessment Year 2005-06 2006-07 2007-08 2008-09 2009-10 Sales/Turnover 7354444 9748994 13186677 18741190 11824952 Net Profit Rate 108562 222346 675590 946175 650372.00 Net Profit Rate 1.48% 2.28% 5.12% 5.05% 5.50% Therefore, the average Net profit rate of assessee is 3.89% and the assessee during the year has declared Net profit rate of 5.50% and the profit declared during current year are encouraging than previous results, therefore Net profit rate of assessee declared may please be accepted. Further for the same assessee, the Net Profit Rate of 5% stands upheld by this Hon'ble Bench for the assessment year 2005-06 (ITA NO 126 (ASR)/2010) The AO may resort to estimation of net profits, when the assessees book results or books of accounts are unreliabl....
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....Raj.) and stood duly approved by the Hon'ble Allahabad High Court in the case of CIT Vs Mahadev Fleet (P) Limited in ITA No. 232 of 2013 order dated 10.09.2013. 9. The Hon'ble Supreme Court in the case of CIT vs. Siamon Carves Ltd. 105 ITR 212 (S.C.) guided the administration of justice by observing that the taxing authorities exercise quasi-judicial powers. In doing so they must act in a fair and not a partial manner. Although it is a part of their duty to ensure that no tax legitimately due form an appellant should remain un-recovered, they must also at the same time not act in a manner as might indicate that scales are weighed high against the appellant. The assessing authority has to look to the substance of the situation and decide the matter in such a manner that neither the Revenue is put to unreasonable loss nor is the assessee subjected to unreasonable hardship as held by the Hon'ble Calcutta High Court in the case of CIT Vs Hazaribagh Coal Syndicate Pr. Ltd. 177 ITR 135 (Cal.). 10. In this background of the matter and in the light of precedents we bring ourselves to the assessment order passed by the AO who has chosen to apply N.P rate of 10% ignoring past h....
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....as confirmed the addition of Rs. 5,72,590.00 u/s. 68 of the Act of wages payable on the basis of not establishing identity of the parties and genuineness of the transactions. 15. The Appellant stated in the written submission that the addition is unjustified and against the law. Further the entire addition of Rs. 572590.00 u/s. 68 of the Act, is based on presumptions by ignoring the facts and circumstances of the case. The Ld. AO made an addition of Rs. 572590.00 on account of wages payable u/s. 68 of the Act on the basis, that assessee could not establish the complete identity of the parties involved and genuineness of the transactions. The appellate produced all possible information in respect of wages and its genuineness stands itself accepted, when trading results of the assessee are accepted. Therefore, question of not establishing genuineness of these transactions does not arise. Further regarding the identity, in this connection, it is submitted, that assessee has mentioned complete name and address in the book of accounts, which is sufficient identity of labour. He has made a reference to section 68 of the act in its reply which reads as under: Kind attention of the Hon&....
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....e turnover on transportation of Rs. 11,70,63,030/- has beat accepted by the AO as genuine, so question of addition of the sum of Rs. 78,22,863/- which represented the liability to pay the truck owners by assessee cannot be added u/s. 68 of the Act. Therefore, we do not find any infirmity in the order of the CIT(A) and we agree that section 68 of the Act was wrongly invoked in the present case in respect of the outstanding liability payable by the assessee to the truck owners. Sanjay Sharma Vs. ACIT (ITAT Delhi) The Assessing Officer has accepted not only the sales figures but has also accepted that total purchases. Under accounting principles, a liability can only be brought into account by a credit entry in the books of account in favour of the person to whom the money is payable' Thus, there is marked difference between a credit representing a liability payable by the assessee and a credit representing monies received from another person. It is because of this distinction, a liability for purchase which has been credited in the account of the supplier cannot be added under section 68 of the Act, more so when the purchase has been accepted as genuine and a deduction theref....