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TMI Blog2013 (4) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts in deleting the addition on account of unsecured loan of ₹ 13,00,000/-. 3. The brief facts of the case are that the assessee company is engaged in the business of transportation. The Assessing Officer at his order page no.1 noted that in compliance to notices, the learned Authorised Representative of the assessee and the Director Shri Ajay Kumar Kejriwal were attended the hearing from time to time and furnished Audited Report, Profit Loss Account and Balance sheet as on 31.03.2007. The case was discussed during the assessment proceedings. The Assessing Officer noticed that the assessee was not able to establish the expenses claimed in the Profit Loss Account. The Assessing Officer invoked section 145(3) of the Income Tax Act, 1961 ( the Act hereinafter) and rejected the books of account of the assessee. After rejecting the books of account, the Assessing Officer estimated the turnover at ₹ 2,60,00,000/- against the turnover declared by the assessee at ₹ 2,48,62,028/-. The Assessing Officer applied 10% rate of profit on estimated turnover of ₹ 2,60,00,000/- and made addition of ₹ 25,52,520/- (26,00,000 47,482 profit declared by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OER NET PROFIT (Cash) (Before depreciation) Cash Net Profit% 2004-2005 5,89,45,150.99 40,16,187.14 6.81% 2005-2006 2,84,93,922.50 34,04,069.87 11.94% 2006-2007 2,48,62,028.04 55,96,677.94 22.51% 6. On perusal of the above comparative position of GP and NP, we notice that the assessee has declared reasonable profit for the year under consideration. Even otherwise also, the case of the Assessing Officer was that the assessee failed to support the expenditure claimed by the assessee and to cover the deficiency the CIT(A) has rightly restricted the NP rate after depreciation and preliminary expenses to the extent of 1% instead of 10% as applied by the Assessing Officer. The Revenue has failed to point out any contrary material to the finding of CIT(A) nor the same is available on record. Under the circumstances, we are inclined to uphold the order of CIT(A). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (PAN ADUPK 1937H) the dues against C.A. Firm which is cleared next year after proper TDS. Copy of account is at page 52 of the paper book. 5. Salary and Khoraki Payable copy of account is at page 53 of the paper book. This is a normal business practice and the amounts are disbursed in the next month. 6. Union Bank of India, Godoulia the bank reconciliation copy of account is at pages 54 of the paper book. The ledger copy of the bank is enclosed at pages 55-59 and the bank statement for the year as well as that for the month of April of the next year are enclosed at pages 60-64 of the paper book, which clearly show the encashment of the relevant cheques in April 2007. The aforesaid details are in respect of sundry creditors having aggregate credit above ₹ 31 lacs out of the figure of ₹ 33,70,171/-. All other details in respect of other petty creditors, as may be desired, can also be submitted to prove the genuineness of all the sundry creditors. Details and particulars of other minor items are also verifiable from the ledger produced herewith and can also be filed if so desire. All the creditors are genuine and the ill-founded addition deserves to be dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be bogus, merely on the basis of presumption, making the addition of entire sundry creditors is not sustainable. In the light of the fact, the addition made by the Assessing Officer is has been rightly deleted by the CIT(A) though on different ground as discussed above. Thus, the addition of ₹ 33,70,172/- made by the Assessing Officer on account of Sundry Creditors has been rightly deleted by the CIT(A) as discussed above. 11. The third addition is of ₹ 13,00,000/- on account of unsecured loan. During the assessment proceedings, the Assessing Officer noticed that the assessee has shown unsecured loan f ₹ 25,78,789/-. The Assessing Officer further noticed from schedule B of Auditor s report that ₹ 13,00,000/- being loan taken from Shri Ajay Kumar Kejriwal. The Assessing Officer made the addition of ₹ 13,00,000/- on the ground that the assessee has failed to establish the creditworthiness of the depositor. The CIT(A) following the judgement of Hon'ble Allahabad High Court in the case of CIT vs. Gaghvendra Pratap Singh (supra) deleted the addition. 12. We have heard the learned Representative of the parties and records perused. In the light ..... X X X X Extracts X X X X X X X X Extracts X X X X
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