TaxTMI 
TaxTMI 
2023 (9) TMI 1216
X X X X Extracts X X X X
X X X X Extracts X X X X
.... CIT(A) erred in law as well as on the facts of the case in confirming the trading addition on account of low Gross profit and net profit. The additions so made and confirmed being totally contrary to the provisions of law and facts of the case, kindly be deleted in full. 3. The learned CIT erred in law and facts of the case in confirming the impugned addition made by the AO by applying higher NP rate of 4% as against the declared NP rate of 1.75%. The additions so made and confirmed being totally contrary to the provisions of law and facts of the case, kindly be deleted in full. 4. Rs. 10,992/- The ld. AO erred in law as well as on the facts of the case in charging interest u/s 234D of the Act. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 5. The appellant prays your honour to add, amend or alter any of the grounds of the appeal on or before the date of hearing." 2.1 At the outset of the hearing the bench noted that the registry pointed out that there is a delay of 113 days. Apropos to this delay in filling this appeal ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the ends of justicethat being the life-purpose of the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But, the message does not appear to have percolated down to all the other Courts in the hierarchy." Prayer: It is, therefore, humbly prayed that this application may kindly be allowed by condoning the delay, taking a sympathetic view, in the interest of justice. Any other order, which this Hon'ble ITAT deems fit and proper, be also passed in favour of applicant assessee." 2.2. During the course of hearing, the ld. DR not objected to assessee's application for condonation of delay and prayed that Court may decide the issue as deem fit in the interest of justice. 2.3. We have heard the contention of the parties and perused the materials available on record. The prayer by the assessee for condonation of delay of 113 days has merit as the filling fees of challan has been paid by the assessee in time this shows the party to be serious in filling the appeal. Therefore, based on the reasons we concur with the submission of the assessee and condone the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enses and Sales receipts of Rs. 2,65,708/- was disallowed by the Assessing Officer for the assessment year 2018-19. The Assessing Officer, on careful consideration of the submission did not find the same acceptable. After intensive study of the case, the contentions of the appellant have been carefully examined. This order is being passed due to lack of concrete evidence and full facts of the case. All the grounds of appeal are dismissed." 5. Feeling dissatisfied the assessee preferred the present appeal on the grounds as stated in para 2 above. The ld. AR appearing on behalf of the assessee has placed on record their written submission which is extracted in below; "Brief Facts: The assessee Firm filed its Return Of Income of the AY 2018-19 on 15.09.2018 declaring Total Income of Rs. 2,06,150/-. The return was selected for scrutiny through CASS on the reason that "turnover shown in ITR is substantially lower in comparison to turnover shown in GSTR-1 return and GSTR 3b Return; Low income compared to large commission receipts". The assessee is Kaccha Arhatiya and is also engaged in his own trading. During assessment proceedings, the AO found that the NP declared in last y....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llant has admittedly maintained complete books of accounts on day to day basis, the other subsidiary record showing the quantitative and financial details both The Purchase , Sale and expenses were duly supported by proper vouchers. The Accounts were even subjected to Tax Audit under S. 44AB of Act. Notably there was no adverse remark made by the ld. Tax Auditor in the Audit Report nor it is so alleged by the ld. AO. Needless to say that the accounts so maintained in the regular course of business has a binding evidentiary value u/s 145 of the Act r/w S.34 of The Indian Evidence Act,1872. Unless the assessing officer reject the books of accounts under cogent ground provided under section 145(3), he does not get any jurisdiction at all to make any variation in the declared results. In other words, S. 145 mandates the AO to accept the results based on the accounts. No addition legally permissible unless accounts rejected: There is a consistent view of various High Courts and Tribunals to this effect. Kindly refer: 1. M/s Bansilal Abirchand Spg. & Wvg. Mills 75 ITR 260 (Bom) (DPB1-2) a. A finding has to be recorded as to the unacceptability of the m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5 (JP) held that "......No additions can be sustained on this account. Books of accounts of the assessee was not rejected and no defect of any kind was found by the AO or by the CIT (A)." 7. Ghewarchand Vs. ITO - XXI TW 571 held that "Therefore we hold that books of account maintained by the assessee were the books of account maintained in the regular course of business. Therefore, the income should be deduced on the basis of books of account maintained by the assessee." 8. Siddheshwari Cotton Mills P. Ltd. V CIT 117 ITR 953 at 957 (Cal) Minor irregularities cannot be made a basis of the rejection of the books of accounts or of trading addition. Kindly refer Padampath Ramgopal 76 ITR 719 (SC). Detailed reasons of low NP and GP were submitted before the ld. AO. The AO is factually incorrect to alleged that no expansion to this effect was filed in as much as vide letter dated 20.04.2022, para 3&4 (PB 5-6) this was fully explained. The same is reproduced hereunder. "3. Assessee has shown GP and NP as actual basis which was decrease as compare to last year but in this business GP rate can not be maintained by the assessee. Assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee, merely proceeding on suspension made the addition by apply ad-hoc NP rate of 4%. GP/NP are beyond control of the Assessee. Even where the accounts are rejected or S. 145 is invoked the law mandates the AO to make a fair estimation providing cogent grounds however, in this case AO is completely silent as to why he adapted 4% NP rate for which there is absolutely no material made available. In the case of CIT vs. Gotan Lime Khaniz Udyog 256 ITR 243 (Raj), it has been held that mere rejection of books of accounts need not necessarily lead to additions to the returned income. It was also held that the books of account, together with past history of the case as also material collected by the AO (of course, after confronting the assessee) should be considered for estimation of income. In view of these facts and circumstances, detailed submissions and judicial guideline the entire additions impugned here deserves to be deleted." 5.1 The ld. AR of the assessee in addition to the written submission also argued that the ld. AO merely based on the comparison of previous year profit considered this year profit @ 4%. The ld. CIT(A) has not considered the submission of....