TaxTMI 
TaxTMI 
2026 (2) TMI 310
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.... accordance with the provisions of sub section (6) of section 250 of the Act. The Appeal filed by the Appellant has been dismissed for non-prosecution. No findings have been given on merit, therefore, the impugned order is liable to be quashed. 3. BECAUSE, upon the facts and in overall circumstances of the case the order passed by the Id Assessing officer dated 15.03.2024 is bad in law and on facts, as the same has been passed hurriedly without properly appreciating the facts of the case. 4. BECAUSE, upon the facts and in overall circumstances of the case the Id AO has erred in law in invoking provisions of section 145(3) of the Act, as there were no any such conditions exist in this case, as mentioned in sub section (3) of section 145 of the Act. 5. BECAUSE, upon the facts and in overall circumstances of the case, the ld AO has erred in law and on facts in invoking provisions of section 145(3) of the Act. There is no mention in the Assessment order as to which conditions existed in the case of Appellant. Sub section (3) of section 145 states that where the Assessing officer is not satisfied about the correctness or completeness of the accounts or where t....
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....01-2021 declaring total income of Rs 6,50,520. The year under consideration is the first year of business of the Assessee. The Assessee had regularly maintained its books of accounts and got it duly audited by an independent chartered accountant. The total turnover declared by the Assessee for the year was Rs 43,25,48,983. The gross profit declared by the Assessee was 30,78,075, which worked out to 0.71% of turnover. The net profit declared by the Assessee before partners remuneration and interest on capital was Rs 33,77,494, which worked out to 0.78% of turnover. The net profit after partners remuneration and interest on capital was Rs 6,50,515, which worked out to 0.15% of turnover. 4. The Learned AO misconstrued the entire business of the Assessee. He stated in Para 2 of the order that Assessee firm derives income from liquor business instead of Beer. Immediately in the next line, he says that Assessee is engaged in wholesale trading of Beer for Agra District as per licence issued by the Excise Department. The Learned AO found the net profit @ 0.15% declared by the Assessee to be very low. The Learned AO noted that the Assessee firm purchases the Beer from the manufacturers a....
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....y submitted the copy of the account and as per the copy of account, the purchase was only Rs. 2,33,33,124.41 and the closing balance was Rs. 18,481.41. 5. In view of the above said discrepancies from few trade debtors, the Learned AO concluded that the Assessee had inflated the sales in its records to reduce the profit of the firm. The Learned AO also noted that from the bank statement of the Assessee firm, the Assessee had made cash deposit of Rs 2,56,20,500 in its Union Bank of India account. He noted that the Assessee being a wholesaler of liquor products and all his customers have a running account with the Assessee firm, as seen from the sales ledgers submitted by the Assessee firm, directly concluded that source of the cash deposit made in the bank account to be not justified. 6. Similarly, copy of rent agreement was called for and examined. The Learned AO noted that as per the rent agreement, the rent payable to SMt Charanjeet Kaur, wife of Satnam Singh was Rs 25,000 per month. As per the ledger account of rent expense submitted by the Assessee firm, the rent paid is shown at Rs 2,40,000 i.e. Rs 20,000 per month. It is very obvious that the Assessee had paid the balanc....
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....s also pointed out that all the payments were received from all the parties only through account payee cheques. Hence, it was pointed out that no deficiency could be attributed in the books of accounts of the Assessee and in the book results of the Assessee as the closing balance duly matched with all the three parties thereon. 10. Further, it was pointed out that the Learned AO had made an observation that Assessee had inflated the sales in order to reduce the profits of the firm. It was submitted that this statement is totally illogical as because when the sales are inflated, it would only go to increase the profit of the firm and it will not reduce the profit of the firm. 11. The Assessee submitted that it is a fact that it had made cash deposits in Union Bank of India to the extent of Rs 2,56,20,500 during the year under consideration. It was submitted that the said cash deposits were made out of available cash balance with the Assessee as per the books of accounts and hence, the source is fully explained thereon. 12. Further, it was pointed out that Assessee is only a wholesale dealer in beer whereas, the Learned AO misconstrued the Assessee's business to be dealing w....