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TMI Blog2015 (12) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... de by CIT (A). Therefore, in the interest of justice, we set aside the appeal of AY 2009-10 back to the file of AO with a direction to inquire, verify, and deal with cash sales recorded by the assessee in accordance with law after affording sufficient and necessary opportunity of hearing to the assessee. - Decided in favour of revenue for statistical purposes. - ITA No. 6332 & 6333/Del/2013 - - - Dated:- 9-10-2015 - SH. I.C.SUDHIR, J.M AND SH. PRASHANT MAHARISHI, AM For The Assessee by Shri Sujit Kumar, Sr. DR For The Revenue by Shri Gautam Jain, Adv. ORDER Per Prashant Maharishi, AM: 01. These two appeals for AY 2008-09 and 2009-10 are directed by revenue against the orders of CIT (A) dated 23/9/2013 and 24/09/2013 deleting the addition of ₹ 17,00,296/- and ₹ 12,00,652/- respectively being net profit on account of alleged fake cash sales. Both these appeals are being decided by a common order, as it was the common stand of the parties before the Bench that the arguments advanced are same due to similarity in facts and law would apply mutatis mutandis to both the appeals. 02. Brief facts of the case is that assessee is a private limited c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 IC on that. Against this assessee preferred appeal before CIT (A) who allowed the appeal of the assessee and therefore revenue is now aggrieved and is in appeal before us raising several grounds of appeal but effectively contesting the deletion of addition of ₹ 17,00,296/- on account of fake cash sales. b. For AY 2009-10 Assessee field return of income on 30.9.2009 for ₹ 10260/- after claiming deduction u/s 80 IC of ₹ 7170850/-. During that year assessee has clocked sales of ₹ 32,22,43,737/- out of which cash sales is ₹ 4,69,00,467/-. During the course of assessment, AO asked for the details of cash sales made by the assessee such as names and address of the parties. However, Assessee submitted only the figure of cash sales but did not furnish ACIT V Dev Bhoomi Steels Private Limited the names and address of the parties. In absence of these details, AO made addition of ₹ 12,00,652/- being 2.56 % of the cash sales as net profit of the assessee based on comparison with other parties. Assessee aggrieved with the order of AO preferred appeal before CIT (A) who deleted the addition relying on the order in case of assessee for AY 2008-09. Agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He also submitted that CIT (A) hasseen the daily sales and position of stock and held that there is no discrepancy in the details and therefore addition has been rightly deleted. He further submitted that facts of the case for AY 2009-10 are also on similar lines. 05. Ld. DR in rejoinder submitted that it is a common practice to identify the comparable for the comparison of net profit and regarding addition of gross profit he submitted that if there is an error made by AO, it may be corrected by the tribunal. 06. We have carefully considered the rival submission and orders of lower authorities. Assessee is a companyengaged in manufacturing of M S Ingots at Haridwar and undisputedly eligible for deduction u/s 80 IC of the act. While going through orders of lower authorities we have come to an understanding that the facts of the case for both the years are not similar however, the manner of making additions is similar. In this background we are deciding the issue for both the years separately as under. 07. For AY 2008-09, Company recorded sales of ₹ 31,03,42,972/- out of which ₹ 6,25,10,899/- is recorded as cash sales. On inquiry in original assessment, one Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have not moved out of the factory, sale prices mentioned in the sales invoices are not contemporary and quantity is not borne out from records of the manufacturing activities of the assessee, merely because the parties who have purchased from assessee in cash by giving proper sales tax C Forms are not traceable, no adverse inference can be drawn against the assessee. It is alsointeresting that though assessee has credited the full sales realised in cash in the profit and loss account as cash sales still AO has made an addition u/s 68 of the act of only Net profit earned by the assessee. In fact, net profit is not sum credited in the books of the assessee but it is a result of trading transactions of sales, purchases, and expenses and to ourmind, provisions of section 68 does not ally to net profit but to sum credited in the books of accounts.Therefore, for AY 2008-09, we confirm the order of CIT (A) in deleting the addition of ₹ 17,00,296/- being N P on cash sales. We dismiss the appeal of the revenue for AY 2008-09. 08. For AY 2009-10, assessee company has recorded gross sales of ₹ 32,22,43,737/- out of which cash sales is ₹ 4,69,00,467/-. AO has made addition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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