TaxTMI 
TaxTMI 
2026 (3) TMI 628
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....s taken for scrutiny and during the scrutiny assessment the assessee was asked the details of creditors which is reflected in his books of accounts. Out of the 100 creditors 26 creditor's confirmation was duly received which was duly asked by the Ld. AO. On enquiry on basis of partial information submitted on behalf of the assessee the vendors CMA CGM SA, MSC Mediterranean Shipping G Company SA and Zim Integrated Shipping Services Limited the Ld. AO observed the discrepancies related to these vendors either the no information for filing of ITR, either not to declare any business income. Accordingly, the Ld. AO rejected the books of accounts of the assessee and estimated the net profit at the rate of 8% to the total turn over. The assessee declared the turnover during impugned financial year amount of Rs. 353,68,00,000/-. The addition was confirmed at the rate of 8% of the total turnover which comes out to Rs. 28,29,44,000/-. After deduction the declared profit amount to Rs. 9,20,00,000/- and the quantum adjustment was made Rs. 19,09,44,000/- which was added back with the total income of the assessee. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) calle....
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....en payments are made through banking channels and duly recorded in books of accounts. 7. The Ld. CIT(A) has correctly adjudicated the issue relying the remand report. 8. The DIT relief certificate are Dept record and have been verified by AO. Without prejudice the CIT(A) called for remand report and complied with the requirement of law. 9. The CIT(A) got notice issued u/s. 133(6) para 5.3.7 pg 18-21 10. The AO relied on assessment order AY 2018-19, the Ld. AO had arbitrarily estimated profit @ 8% of turnover, which the CIT (Appeals) deleted vide order dated 7/10/2024 pg no. 125-15. 11. Making additions of Rs. 19,09,44,000/- simply on basis of Vendors filing Nil turnover and based upon the earlier assessment order. Estimating the profit margins @ 8% of total turnover is unjustified. 12. The earlier year assessment order for AY 2018-19 is considered by AO while passing the assessment order for AY 2022-23. However additions made in AY 2018-19 is deleted by CIT(A) vide order dated 7/10/2024. This order of CIT(A) is accepted by dept. 13. It is further brought to notice that AY 2021-22 also assessment is completed u/s. 143(3)....
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....made substantial submission which would rebut the observations made while making above addition in assessment order. 5.3.7 In order to verify the claim of the appellant, notices u/s. 133(6) of the Act were issued to three major vendors of the appellant company namely M/s. CMA CGM SA, M/s. MSC Mediterranean Shipping Company SA and M/s. ZIM Integrated Shipping Services Limited to verify and reconfirm the genuineness of business transactions reported by the appellant company. In response, M/s. ZIM Integrated Shipping Services Limited has responded and submitted the details requested therein. The same is reproduced below for reference." xxxxxxxxxxxxxx Subsequently, M/s. MSC Mediterranean Shipping Company S A has also responded and submitted the details requested therein. The same is reproduced below for reference: xxxxxxxxxxxxx 5.3.8 I have carefully considered the assessment order, remand report, written submissions, and evidence furnished by the appellant as well as the confirmation by two, third parties on the basis of which I find that the AO is wrong in estimating 8% of the total turnover of the appellant as profit. On examination of re....
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....ssment and the assessee has not claimed any sufficient cause that may have prevented him from filing the evidence during the assessment procedure. Thus, the assessee does not satisfy any conditions laid down in Rule 46A of the Income Tax Rules, 1962 and thus, the evidence should not be accepted as it is not any additional evidence in the first place." 6. We have heard the rival submissions and carefully examined the material available on record, including the assessment order, remand report, written submissions of the assessee, and the impugned order of the Ld. CIT(A). It is an undisputed fact that the assessee is engaged in the business of logistics and freight forwarding since 2005 and had declared a total income of Rs. 9,31,33,090/- on a turnover of Rs. 353.68 crores for the year under consideration. The Ld. AO rejected the books of account primarily on the ground that confirmations from all trade creditors were not furnished and that certain major vendors had filed nil or non-business returns in India. On this basis, the Ld. AO estimated the net profit at 8% of the total turnover and made an addition of Rs. 19,09,44,000/-. However, from the record it is evident t....