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2024 (6) TMI 209 - AT - Income TaxIssues involved: The judgment involves issues related to addition of undisclosed income u/s 69A, enhancement of net profit rate, reduction of gross income declared, benefit of contra entries and CC bank interest, jurisdiction of assessment u/s 153A vs 153C. Addition of undisclosed income u/s 69A: The appellant contested the addition of Rs. 2103912/- made by the Ld. CIT(A) u/s 69A, comprising Rs. 1602829/- for credits in saving accounts and Rs. 501083/- for difference in undisclosed profit. The appellant argued that the addition should be restricted to profit element only, considering the nature of the credits as sale proceeds from a bakery business. Additionally, the appellant claimed that u/s 69A could not be applied due to the absence of maintained books of accounts. However, the Ld. CIT(A) upheld the addition without considering these contentions. Enhancement of net profit rate: The Ld. CIT(A) increased the net profit rate from 6% to 8% on total credits in the CC Account, resulting in the addition of Rs. 501083/-. The appellant objected to this enhancement and the lack of notice of enhancement u/s 251. The appellant also argued that the net profit rate should align with the disclosed turnover reflected in the ITR. However, the Ld. CIT(A) confirmed the addition without addressing these concerns. Reduction of gross income declared: The Ld. CIT(A) reduced the gross income declared under the head PGBP from Rs. 649217/- to Rs. 486163/-. The appellant raised this as a ground of appeal, contesting the reduction without providing further details in the judgment. Benefit of contra entries and CC bank interest: The Ld. CIT(A) did not consider the benefit of contra entries and CC bank interest in determining the undisclosed income, as pointed out by the appellant. However, the judgment did not elaborate on the specifics of this issue. Jurisdiction of assessment u/s 153A vs 153C: The appellant challenged the assessment framed u/s 153A, arguing that it should have been framed u/s 153C based on material seized from another company's premises. The appellant contended that the assessment was without jurisdiction as the material was not from the appellant's premises. The Ld. AR emphasized that the assessment order should be quashed as void ab initio due to this jurisdictional issue. The Ld. DR did not counter this argument. The Tribunal agreed with the appellant, holding that the assessment under Section 153A was without jurisdiction and quashed the assessment order. This summary provides a detailed overview of the issues involved in the legal judgment, highlighting the arguments presented by the appellant and the decisions made by the Ld. CIT(A) and the Tribunal.
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