TaxTMI 
TaxTMI 
2025 (1) TMI 1171
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....n ITA No.328/Hyd/2024 are reproduced as under : 1. The order passed by the Ld.CIT(A) u/s 250 of the Act dated 12.02.2024 is erroneous both on facts and in law to the extent the order is prejudicial to the interest of the appellant. 2. The Ld.CIT(A) erred in upholding the order of assessment passed by the AO on 29.12.2019 without actually appreciating the facts of the case and submissions made by the assessee, which is against the provisions of law and principles of natural justice. 3. The Ld.CIT(A) ought to have appreciated the fact that the appellant has reasonable cause for non-compliance to notice issued during the assessment proceedings and that completing the assessment by the AO by applying the provisions of Section 144 of the Act is not correct, which is liable to be quashed. 4. The Ld.CIT(A) ought to have quashed the assessment made u/s 144 of the Act and ought to have appreciated the fact that when the assessment itself is invalid, the additions made in such assessment are invalid and are liable to be deleted. 5. The Ld.CIT(A) erred in upholding the addition of Rs. 27,70,67,789/- made towards ad-hoc 10% of sale of services, whic....
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....ng the fact that the cash deposits stand explained and the addition of the same as unexplained is not correct as per the provisions of the Act. 17. The assessee may add, alter, or modify or substitute any other points to the grounds of appeal at any time before or at the time of hearing of the appeal. 3. The brief facts of the case are that the assessee, M/s Meena Jewellers Extension Private Limited is into the business of trading in jewellery, filed its return of income, for the A.Y.2017-18 on 07.11.2017, declaring Nil income, after carrying forward current year losses of Rs. 37,31,97,233/-. The case was selected for scrutiny and notice u/s 143(2) of the Income Tax Act, 1961 ("the Act") dated 08.08.2018 and notice u/s 142(1) of the Act were issued from time to time to the assessee company through ITBA portal, calling for relevant information / documents. However, the assessee neither appeared, nor filed any details. Therefore, the AO issued final show cause notice dated 29.11.2019 and called upon the assessee to explain as to why the assessment proceedings shall not be completed u/s 144 of the Act, based on the material / information available on record. Since there is....
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....tchwala Gems Vs.JCIT 288 ITR 10 (2007)(SC) and held that when the assessee has not furnished relevant evidences, the AO is left with no option but to resort to estimation of profit from the business and such estimation is based on the material available on record, which also involved certain degree of guess work. The Ld.CIT(A) had also upheld the additions made by the AO towards estimation of net profit on total turnover by following the decision of Hon'ble Supreme Court in the case of Commissioner of Sales Tax Vs. H.M. Esufali H.M.Abdulali [1073] 90 ITR 271(SC) and observed that in this line of business, normal profit margin would be in the range of 43.5% in 2013 and 42.6% in 2017. Therefore, the AO has reasonably adopted 10% net profit, based on the material available on record. Therefore, the findings and facts recorded by the Assessing Officer, while estimating net profit on sales turnover cannot held to be on higher side. The Ld.CIT(A) had also upheld the additions made towards liabilities u/s 68 of the Act, by following certain judicial precedents and held that when the assessee had not filed relevant evidences to prove the identity, genuineness and creditworthiness of the pa....
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....he explanation furnished by the assessee and sustained the additions made by the AO. Similarly, the Assessing Officer has made additions towards cash deposited during demonetization period u/s 69A of the Act, even though the assessee has maintained regular books of accounts and the money deposited in their bank accounts were recorded in the books of accounts. The assessee had also explained the source for the cash deposited, out of sales declared for the relevant period. Since the assessee has not filed relevant evidences before the Assessing Officer, the Assessing Officer has made additions towards total cash deposits made during the demonetization period. These facts need to be examined by the Assessing Officer. Therefore, the matter may be set aside to the file of the Assessing Officer to give another opportunity of hearing to the assessee. 8. The learned DR, on the other hand, supporting the order of the Ld.CIT(A) submitted that admittedly, assessment proceedings before the Assessing Officer are ex-parte. The assessee neither appeared nor filed any details, therefore, we cannot find any fault with the best judgment assessment order passed by the Assessing Officer. Further, t....
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...., the Directors were missed the proceedings before the Ld.CIT(A). Further, the assessee has maintained regular books of accounts and also obtained relevant information to justify its financial results declared for the year under consideration and given the chance, the assessee will produce all evidences to justify the case. 10. Having considered the arguments of both the sides, we find that admittedly, the AO has made additions towards net profit from business by estimating 10% profit on total turnover of the assessee. Although the AO has estimated profit from the business, there is no finding from the AO in respect of books of accounts maintained for the relevant assessment year and its correctness. It is a well settled principle of law by the decision of various courts that before going for best judgement assessment u/s 144 of the Act, the AO needs to reject the books of accounts of the assessee with valid reason. In the present case, although the AO has discussed the financial results of the assessee declared for the impugned assessment year and observed that the net profit margin of 1.95% declared by the assessee is very low, there is no reason as to how the Assessing Office....
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....riod, the assessee has made cash deposit of Rs. 10,53,48,500/-. The AO made additions towards cash deposits during demonetization period u/s 69A of the Act as unexplained money. It was the argument of the assessee that the cash deposited during the demonetization period is out of sales recorded in the books of accounts of the assessee during the relevant period. The assessee has maintained books of accounts and explained sources for cash deposited. The bank accounts considered by the AO are part of regular books of accounts of the assessee and therefore requested to set aside the issue to the file of the AO for examination of the facts. In our considered view, the AO has made additions towards total cash deposited during demonetization period without any analysis, whether it is recorded in the books of accounts of the assessee or it is unexplained money, not recorded in the books of accounts of the assessee, to make additions u/s 69A of the Act. In our considered view, in order to make additions u/s 69A of the Act, the AO has to give a clear finding that the assessee is owner of the money and could not explain the source of the said money to the satisfaction of the AO. Since the AO....