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TMI Blog2012 (7) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim was settled for Rs.16,70,100 - The claim of loss has also been certified by the Assistant Commissioner, Food & Drug Department, thus the view of the CIT (A) that the loss of goods is nothing but deduction made by insurance company as per the policy conditions and therefore the same has to be considered as allowable deduction - against revenue Addition on account of low G.P - CIT(A) deleted the addition - Held that:- The business of assessee is governed by the regulation of Food and Drug Control Act and all records of purchase and sales are subject to verification by those authorities. No discrepancies have been noticed by them. The reasons for fall in GP have not been controverted by the Revenue nor have they brought on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. It is therefore, prayed that the order of the CIT (A)-IV, Surat may be set aside and that of the Assessing Officer restored. 3. The brief facts of the case are that assessee is an individual in the business of trading of medicines on wholesale basis.He filed Return of income on 31-10-2007 declaring total income at Rs.3,49,233/-. Case was selected for scrutiny and the assessment was completed u/s.143(3) of the Act on 29-12-2009 determining the total income at Rs.15,57,741/- by making various disallowances/additions. Aggrieved by order of A.O. the assessee preferred appeal before the CIT (A) where the appeal of the assessee was allowed. The Revenue is therefore, now in appeal before us. 4. Ground No.1 is against the addition of Rs.7,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 + 50,000 + 4,00,000) as unexplained credits u/s. 68. Aggrieved by the action of the A.O. the assessee preferred appeal before CIT (A) and submissions were made. CIT (A) after considering the submissions, CIT (A) held that the rejection of the source and creditworthiness of the loan creditors by the A.O. was bassed purely on doubts. He was of the view that the cash credits were explained as to its nature and source and therefore deleted the additions made. Aggrieved by the order of CIT (A), the Revenue is now in appeal before us. 5. Before us it was submitted by the D.R. that the source iof cash deposited in the bank accounts of the depositors were unexplained and that the assessee has failed to prove the genuineness of the case cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough cheque on 16-1-2010 and interest has also been paid on the amount borrowed. It was thus submitted that the assessee has discharged his onus by proving the identity of the creditor, the capacity of the creditor and the genuineness of the transaction. The Ld. A.R. also pointed to the finding of CIT (A). He thus supported the order of the CIT (A). 7. We have heard the rival submission and material on record. The undisputed fact is that the assessee has taken loans from Shri Shailesh Shah, Smt. Kalpana Shah and Ramesh Gandhi. The assessee has discharged the onus cast upon him by proving the identity of the creditor, the capacity of the creditor and the genuineness of the transaction. Nothing has been brought on record by the Revenue to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not correct. He thus relied on the order of the A.O. 10. On the other hand, the Ld. A.R. submitted that the assessee has been doing the business after obtaining license from Food and Drug Administration Department. The list of goods destroyed by flood was verified and certified by the Assistant Commissioner, Food and Drug Department. He placed the certificate of Food and Drug Administration on page 88 of the paper book and detailed FDA certified list of goods on page- 89 to 136 of the paper book. The same were also certified by the Surveyor appointed by the Insurance Company. The Insurance Company has not questioned the quality, quantity and rates of medicines as described in the certificate. 11. We have heard the rival contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the G.P. has reduced, the net profit of the assessee has increased. The A.O. has not found any discrepancy in the books of accounts and the books of accounts have also not been rejected. He further held that addition on account of G.P. cannot be made simply because the GP had fallen, in comparison to another year. The Department being aggrieved is now in appeal before us. 14. Before us the Ld. D.R. relied on the order of the A.O. On the other hand the Ld. A.R. submitted that in the preceding year the assessee was offering customers 1 month credit but in the current assessment year instead of offering credit the assessee has started offering discount of 2 to 3% to the customers who make the payment within the a week. Another reason for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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