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2022 (7) TMI 1297 - ITAT MUMBAIRejection of books of accounts - addition to the gross profit - HELD THAT:- The books of accounts of the assessee have been rejected mainly in absence of books of accounts, bills vouchers etc. produced before the AO and on the allegation of accommodation entry transactions carried out with M/s Mirah Décor group entities. Before us, the assessee has submitted that during the year under consideration there was no transaction with M/s Mirah Group entities. This fact of vital importance, has not been verified by the AO in absence of books of accounts and bills and vouchers etc. produced by the assessee. Now before us, in written submissions, the assessee has expressed willingness to produce books of accounts, bills vouchers etc. for verification by the AO. We feel it appropriate to restore the issue-in-dispute to the file of the Assessing Officer for deciding afresh. The ground No. one of the appeal is accordingly allowed for statistical purposes. Addition in respect of loans which have been held as cash credit u/s 68 - AO held that assessee failed to establish (i) identity of the loan provider (ii) creditworthiness of loan providers and (iii) genuineness of the transactions, and therefore he held those loans as unexplained cash credit in terms of section 68 - assessee filed a letter before the CIT(A) wherein the assessee had requested for filing additional evidences, because those evidences could not be filed before the Assessing Officer.HELD THAT:- We find that in the case of M/s Sunrise Associate [2022 (7) TMI 934 - ITAT MUMBAI] in view of retraction of statement by Sh. Gautam Bhanwarlal Jain, has restored the matter of addition u/s 68 , back to the Assessing Officer for re-examination. DR could not controvert that there was limited time frame in which the assessee was asked to provide the information and before the assessee could file the said information, the assessment order was passed on 22/12/2017. In our opinion, the assessee fulfils the circumstances under Rule 46A(1)(d) i.e. no sufficient opportunity, therefore additional evidences are eligible for admission. Since in respect of the ground No. 1 of the appeal, we have already restored the issue-in-dispute to the file of the Assessing Officer and therefore, for avoiding multiplicity of simultaneous proceedings, instead of restoring the matter to the file of Ld. CIT(A), we feel it appropriate to restore the issue GP Estimation - estimation of the brokerage income - HELD THAT:- Assessee has declared gross profit @ 5.12% on the transactions recorded in the books of account - AO has treated those very transactions related to M/s M/s Mirah Group as transaction of providing accommodation entry without any real business but has not excluded the income offered by the assessee from said transactions of business. AO has separately made addition @ 2% on the very same transaction on which the AO has declared gross profit rate of 5.12%. In our opinion, a separate addition for the brokerage or commission is not required in the facts of the case. The commission or brokerage @ 2% can be considered as generated from accommodation entry transactions, which subsumes in the gross profit @ 5.12% already declared by the assessee. The only difference is of characterization of the source of the income which according to the AO is from the issuing accommodation entry bills whereas according to the assessee profit has been earned from business activity recorded in books of account. Thus lower authorities are not justified in making addition over and above the income @ 5.12% offered by the assessee from business transaction
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