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TMI Blog2015 (4) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... t revenue. Rejection of books of accounts - CIT(A) accepting the books reliable - Held that:- a clear finding has been given by CIT(A) that mistake pointed out by the Assessing Officer in the assessment order regarding some mistakes noted for recording of vouchers etc. cannot lead to the rejection of the entire accounts because no mistake has been pointed out by the Assessing Officer in the books of account maintained by the assessee. He has also given a finding that the assessee has brought on record, the assessment order in Sales Tax proceedings and the Assessing Officer could not point out any specific amount of sales not accounted for or purchases not accounted for. He has also given a finding that the Assessing Officer could not point out any purchase or sales which is sham. None of these findings could be controverted by Learned D.R. of the Revenue and we also find that in the present year, the assessee has reported a gross profit of 12.84% as against 12.62% in assessment year 2004-05 and 11.66% in assessment year 2003- 04. Hence, it is seen that the gross profit rate reported by the assessee is also higher than the preceding two years. Considering all these facts, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Yadav And Shri A. K. Garodia,JJ. For the Appellant : Shri Puneet Kumar D. R. For the Respondent : None ORDER Per A. K. Garodia, A.M. Both these appeals are filed by the Revenue in two inter connected cases for the same assessment year i.e. assessment year 2005-06 and these appeals are directed against two separate orders of learned CIT(A)-II, Kanpur both dated 01/10/2010. Both the appeals were heard together and are being disposed of by way of this common order for the sake of convenience. 2. First we take up the appeal of the Revenue in the case of Kapila Krishi Udyog Ltd. i.e. I.T.A. No.751/Lkw/2010. 3. Ground No. 1 is as under: 1. That the Ld.CIT(A) has erred in law and on facts in deleting the excess stock valuation of ₹ 50,25,493/- without appreciating the facts of the case. 4. Learned D.R. of the Revenue supported the assessment order. It was noted by the Bench that various opportunities were provided to the Revenue to produce inventories of stock prepared by the survey team during the course of survey and the stock shown by the assessee as per its books of account on that date. Such direction was given by the Bench for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en taken on estimation and thus cannot be taken as an evidence against the appellant as has been held in Commissioner Of Income-tax, Delhi-I, New Delhi V. Bansal High Carbons (P.) Ltd. 165 TAXMAN 0243 (DEL.) 10. In view of the above facts, elaborate evidence and legal lapses in the issue involved which are contrary to procedures of testing the evidence given by appellant, and the facts of estimated inventory, which is doubtful in its calculation/ measurement and correction, and same being relied upon by AO without considering the facts and documents of explanation of appellant, the addition in respect of alleged excess stocks is deleted. 6.1 From the above paras from the order of CIT(A), it is seen that a clear finding has been given by CIT(A) that physical removal from stacks and weighment in respect of approximately 1,00,000 bags of agricultural products was not possible in such time frame. He has further noted that the assessee on the very next day of survey had given an affidavit of the incorrect taking of stocks by the department and retraction as to the surrender which was done under pressure. He has also noted that the Assessing Officer has also not commented upon or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt out any specific amount of sales not accounted for or purchases not accounted for. He has also given a finding that the Assessing Officer could not point out any purchase or sales which is sham. None of these findings could be controverted by Learned D.R. of the Revenue and we also find that in the present year, the assessee has reported a gross profit of 12.84% as against 12.62% in assessment year 2004-05 and 11.66% in assessment year 2003- 04. Hence, it is seen that the gross profit rate reported by the assessee is also higher than the preceding two years. Considering all these facts, we are of the considered opinion that no interference is called for in the order of CIT(A) on this issue also. This ground is also rejected. 10. Ground No. 3 is as under: 3. That the Ld. Commissioner of Income tax (A) has erred in law and on facts in deleting the addition in respect of negative cash found without verifying the facts of the case. 11. Learned D. R. of the Revenue supported the assessment order. 12. We have considered his submissions. We find that this issue was decided by learned CIT(A) as per Para 18 of his order, which is reproduced below for the sake of ready refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erted by Learned D.R. of the Revenue and considering these facts, we are of the considered opinion that no interference is called for in the order of CIT(A) on this issue also. Ground No. 3 is also rejected. 13. In the result, the appeal of the Revenue stands dismissed. 14. Now we take up the appeal of the Revenue in the case of Kamdhenu Cattle Feed, Kanpur i.e. I.T.A. No.746/Lkw/2010. 15. Ground Nos. 1 to 4 are inter connected, which read as under: 1. That the learned CIT(A) Kanpur has erred in law and on facts of the case in allowing the deduction under section 80IB of Income Tax Act amounting to ₹ 20,62,732/- without appreciating the fact that the production/manufacturing of cattle feed to M/s Kamdhenu Cattle Feed and M/s Kapila Krishi Udyog Ltd. (sister concern of the assessee firm) were carried out at the same premises and the manufacturing process of the assesses firm and its sister concern was found to be intermingled. 2. That the learned Commissioner of Income Tax (Appeals)- I, Kanpur as erred in law and on facts in allowing the appeal of the assessee without appreciating that during the course of survey it was revealed that production/manufacturing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to grant him deduction u/s.801B for the reasons discussed in earlier appellate orders. Hence, Grounds No. 1 and 2 of appeal are allowed. 17.1 From the above Para from the order of CIT(A), we find that a clear finding is given by him that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 2003-04. In the paper book, the assessee has furnished a copy of the Tribunal order for assessment year 2003-04 and 2004-05. Learned D.R. of the Revenue could not show us that this issue is not covered in favour of the assessee by the Tribunal decision in assessee s own case for assessment year 2003-04 and 2004-05. Hence, we do not find any reason to take a contrary view in the present case. Respectfully following this Tribunal decision, we decline to interfere in the order of CIT(A). Accordingly, ground no. 1 to 4 are rejected. 18. Ground No. 5 is as under: 5. That the learned CIT(A) has erred in law and on facts in deleting the addition of ₹ 17,24,487/- made u/s 68 without appreciating the fact that the assessee failed to prove identity, credit worthiness and genuineness of the transactions. 19. Learned D. R. of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in (2006) 156 Taxman 507 by the Hon'ble Allahabad High Court that once sales and purchases are accepted as such, then addition in respect of trade creditors is not justified u/s 68. As such the addition made by the AO in respect of advance from customers amounting to ₹ 17,24,487/- is hereby deleted. 20.1 From the above Para from the order of CIT(A), we find that it is noted by CIT(A) that in all the earlier years and subsequent years, the advance of customers as reported by the assessee were accepted by the Assessing Officer in the assessment order framed u/s 143(3) of the Act. In the present year also, the Assessing Officer has accepted this practice and out of total amount of ₹ 55.37 lac, he has made addition of ₹ 19.70 lac for which advances were received in cash but he has accepted the balance amount of ₹ 35.67 lac for which advances were received through cheque. In our considered opinion, only because the advances were received in cash, it cannot be said that the advances are not genuine. The assessee has submitted all the confirmations but the Assessing Officer had not verified the same. This is also noted by him that the sales against these ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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