9911796707
TMI Blog2012 (12) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... sale trader in medicines and has filed his return of income at Rs. 88,583/- on 31.10.2006. The case was selected for scrutiny and notice u/s 143(2) of the Income Tax Act , 1961 (in short ' the Act ') was issued to the assessee. The assessee did not respond to the above notice. Further, notice u/s 143(2)/142(1) of the Act dated 31.5.2008 along with questionnaire were issued and served upon the assessee. Despite the service of above notices, the assessee did not attend the hearings before the Assessing Officer. Again letters dated 1.9.2008 and 17.9.2008 were also issued to the assessee. The assessee did not appear before the Assessing Officer. In the above circumstances, the Assessing Officer completed the assessment u/s 143(3) read with section 144 of the Act on 11.12.2008. The Assessing Officer made the addition of Rs. 9,40,000/ - observing as under: - "3) As the additional sales has been estimated at Rs. 10,00,000/-, corresponding purchase figure will also have to be enhanced to affect the additional sales of Rs. 10.00.000/-. Again, it is to mention here that the books of accounts have not been produced and after reducing the gross profit of Rs. 60,000/- estimated above addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of gross profit out of addition of Rs. 10,00,000/- and consequently assessee gets part relief of Rs. 5,00,000/-." 6. We have heard the rival submissions and have also perused the materials available on record. We have also perused the remand report dated 28.11.2009 submitted by the Assessing Officer before the CIT(A). In the remand report, the Assessing Officer has clearly mentioned that the assessee has produced the certified copies from the sales tax department of quarterly sale tax returns in support of his claim of purchases/sales made during the year. The Assessing Officer further observed that in the quarterly sales tax returns, the assessee has shown sales of Rs. 50,05,936/ - i .e. sale figure shown in the trading profit and loss account filed by the assessee as on 31.3.2006. However, the fact remains that assessee did not produce books of account before the CIT(A) of before the Assessing Officer and possibility of unaccounted sales and purchases cannot be ruled out fully. In the remand report , the Assessing Officer has also mentioned that in the Audit Report the Auditor has mentioned that the assessee has not maintained any stock register or quantitative stock tally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Assessing Officer, he, therefore, estimated the sales at Rs. 60,05,936/ - on which gross profit was worked out at Rs. 60,000/ -. The Assessing Officer added a sum of Rs. 60,000/ - to the total income of the assessee. 9. On appeal, the CIT(A) sustained the addition of Rs. 30,000/ - out of total addition of Rs. 60,000/ - made by the Asses sing Officer on account of gross profit. 10. We have heard the rival submissions. In para 2 of the assessment order, the Assessing Officer observed that the GP rate shown at Rs. 3,25,400/ - on the total sales of Rs. 50,05,936/ - is slightly on higher side when compared to GP rate of the preceding year . However, the fact remains that the assessee did not produce the books of account . Thus, the sales affected/shown are not subject to verification. At the same time, we may also observe that the addition sustained by the CIT(A) appears to be on higher side. Considering the entire facts and circumstances of the present case, we reduce the addition to Rs. 15,000/ - particularly when the sales affected/shown are not subject to verification. Thus, the assessee gets a further relief of Rs. 15,000/ - on this account . Ground No.3 of the appeal is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmittedly, Shri Harbans Singh is the father of the assessee, who is regularly assessed to tax. It is also clear from the remand report that loans of Rs. 1 lac received by the assessee f rom Shri Harbans Singh and Rs. 18,000/ - from his mother Smt . Surjit Kaur have been accepted by the Assessing Officer stating that these loans pertain to earlier year. Thus, it is clear that in earlier year, the department has not doubted the credit worthiness of Shri Harbans Singh in advancing the loan of Rs.1 lac. Similarly, the department has not doubted the genuineness of the transaction in earlier years. In the year under consideration, the assessee furnished a declaration of Shri Harbans Singh, wherein he has confirmed having given unsecured loans of Rs. 1,15,000/ - to the assessee from his own sources of income. A copy of the saving bank account No. 3015314 of Shri Harbans Singh with OBC was also filed before the lower authorities. As per the said copy, Shri Harbans Singh had withdrawn Rs. 50,000/ - and Rs. 65,000/ - on 7.11.2005 and 2.1.2006 respectively. The contention of the assessee before the lower authorities was that these funds were used by Shri Harbans Singh for purchasing demand d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
