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TMI Blog2015 (7) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... have any employees. It only supports the contention of the assessee that she is simply working as an intermediator between the buyer and the seller. She first books the order from the buyer and then arranges for the seller. The goods is supplied directly by the seller to the buyer and the payment to the seller is made after receiving the payment from the buyer. She has also explained that she has kept a very small percentage of margin so as to achieve huge turnover. All the facts narrated by the Assessing Officer for rejection of books of accounts and estimation of profit does not satisfy the conditions prescribed u/s 145(3) for rejection of books of accounts. On the other hand, these facts justified low GP disclosed by the assessee. Moreover, we find that under the identical set of facts, the Assessing Officer in the order passed u/s 143(3) in assessee’s own case for Assessment Year 2010-11, accepted the assessee’s books of accounts wherein the GP rate of 0.13% is disclosed. - Decided in favour of assessee. - ITA No.1033/Ahd/2011 to ITA No.1035/Ahd/2011,ITA No.1038/Ahd/2011 to ITA No.1041/Ahd/2011 - - - Dated:- 17-7-2015 - Shri G.D. Agrawal and Shri Rajpal Yadav, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intermediator between the seller and buyer and the assessee could achieve huge turnover only by keeping her margin at very low. The Assessing Officer has wrongly mentioned that the assessee has taken much risk to gain the nominal profit. He submitted that in the business model followed by the assessee no risk was involved. He further pointed out that on the identical facts in assessee s own case for Assessment Year 2010-11, in the order passed u/s 143(3), the Assessing Officer has accepted the GP rate of 0.13% on the turnover of ₹ 24.45 Crores. He also referred to the order of the ITAT in the case of M/s. Vishal Finance Corporation (a group concern) in which the identical addition was made by the Assessing Officer which was deleted by the CIT(A). The ITAT, vide order dated 15.05.2015 in ITA No.1042/Ahd/2011, sustained the order of the CIT(A) and dismissed the appeal filed by the Revenue. 5. We have carefully considered the arguments of both the sides and perused the material placed before us. The Assessing Officer has given the following reasons for the rejection of books of accounts:- 4. The submission of the assessee is concerned but not acceptable due to the given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Gazette from time to time accounting standards to be followed by any class of assessees or in respect of any class of income. (3) Where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) or accounting standards as notified under sub-section (2), have not been regularly followed by the assessee, the Assessing Officer may make an assessment in the manner provided in section 144. 7. From the above, it is evident that the Assessing Officer can reject the books of accounts if, i. he is not satisfied about the correctness and completeness of accounts; ii. where the method of accounting or accounting standards as prescribed has not been followed regularly. The Assessing Officer, while rejecting the books accounts, has not pointed out that the books of accounts of the assessee is incorrect or incomplete. Similarly, he has no where stated that the assessee did not follow the method of accounting provided u/s 145(1) or accounting standards as prescribed u/s 145(2). Therefore, in our opinion, no adequate reasons have been given by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, the income returned by the assessee is accepted. 8. Admittedly, the nature of the books of accounts and method of accounting in the year under consideration is identical to the books of accounts as well as method of accounting of Assessment Year 2010-11 which is accepted by the Revenue in the order passed u/s 143(2). We also find that under the identical set of facts, the ITAT-Ahmedabad Bench sustained the order of the CIT(A) in the case of M/s. Vishal Finance Corporation, vide ITA No.1042/Ahd/2011, wherein the ITAT observed as under:- 7. From the bare reading of this section, it would reveal that it provides the mechanism how to compute the income of the assessee. According to subclause (i), the income chargeable under the head Profits and gains of the business or professions or income from other sources shall be computed in accordance with the method of accountancy employed by an assessee regularly subject to the sub-section (2) of section 145 of the Act. Sub-section (2) provides that the Central Government may notify in the Official Gazette from time to time the accounting standard required to be followed by any class of assessee in respect of any class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwal : AY 2007-08 08-09 ITA Nos.1040 1041/Ahd/2011 : Assessee - Smt R.P. Agarwal : AY 2007-08 08-09 10. All the above six appeals by the Revenue involved the identical issue wherein the CIT(A) deleted the GP addition made by the Assessing Officer. All the above persons are the family members of the same group and the similar trading addition is made in all the above cases which are deleted by the CIT(A). 11. At the time of hearing before us, both the parties fairly admitted that the facts of above six cases are identical to the facts in the case of Smt. Satyabhama A. Chiripal. Therefore, the arguments in the case of Smt. Satyabhama A. Chiripal would be equally applicable in all the cases. 12. We have already considered the arguments of both the parties in the case of Smt. Satyabhama A. Chiripal. For the detailed discussion above in paragraph Nos. 5 to 9, we are of the opinion that the CIT(A) was justified in deleting the GP addition made by the Assessing Officer. We, therefore, uphold his order and dismiss all the appeals filed by the Revenue. 13. In the result, all the appeals filed by the Revenue are dismissed. Order pronounced in the Court on 17th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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