9911796707
TMI Blog2016 (12) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 292C, it is clear that assessee has made purchases of construction material which belong to the business of the assessee and in the absence of any plausible explanation, the authorities below were justified in making the addition under section 69C of the Act. No infirmity have been pointed out in the orders of authorities below. We, therefore, do not find any merit in this ground of appeal of the assessee. Addition on account of estimation of net profit - Held that:- Hon'ble Punjab and Haryana High Court in the case of CIT vs. K.S. Bhatia [2002 (9) TMI 8 - PUNJAB AND HARYANA High Court] held that, "Mere fact that the profits were low compared to the earlier years was not a circumstance or material which could justify an estimate in the circumstances of the case". As noted above, since the assessee has already surrendered additional income of ₹ 25 lacs in assessment year under appeal and no other reasons have been given by the Assessing Officer for estimating higher profit rate. Therefore, mere low NP rate shown in assessment year under appeal by itself is no ground to make addition of this nature against the assessee. We, therefore, do not justify th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of receipt as well as mode of receipts. c) Please produce regular books of account to reconcile these entries. 5(i) The assessee in his reply before Assessing Officer submitted that though the seized paper have not been written by the members or the employees, however, from the contents of the papers, it appears that the same relate to some fruit/vegetable commission agent as in few cases, trade mark such as G.S.M., B.C.S., R.H.S., J.P.B., B.L.S. etc. have been mentioned by the writer of the document. The assessee has no concern with the document in question. The Assessing Officer considered the reply of the assessee and noted that the assessee has merely stated that said document did not belong to him. The assessee has not brought any material on record in support of the contention. The assessee was asked to explain why the expenses recorded on the said page should not be treated as its unexplained expenditure under section 69C of the Act. No explanation was filed by the assessee. The Assessing Officer, therefore, treated the same to be unexplained expenditure under section 69C of the Act and made the addition of ₹ 8,11,490/-. 6. The addition was challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, ld. DR submitted that seized documents were supplied to the assessee which have been scrutinized by the assessee but no explanation was filed before the authorities below. Section 292Cwill apply against the assessee. 9. After considering rival submissions, we are of the view addition is wholly unjustified. The Assessing Officer by referring to above seized document has mentioned that these documents are hand written pages and contain the details of payments received on various dates. The Assessing Officer issued Show Cause notice to the assessee to explain the name and address of the persons from whom the payments mentioned in the seized document have been received and also to explain nature of receipt as well as mode of receipts. The Assessing Officer, therefore, was of the view that it is unaccounted money received by the assessee from third party, as such it is unaccounted income of the assessee. However, the Assessing Officer while concluding the issue has considered it to be a case of unexplained expenditure incurred by assessee under section 69C of the Act. The whole finding of the Assessing Officer thus, clearly shows that Assessing Officer has passed a contradictory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee). The Assessing Officer noted that the seized documents are hand written pages and contained details of construction material purchased on 30.02.2006 and 30.04.2006 and payments made by the assessee. The scanned copy reproduced in para 5 of the assessment order. The Assessing Officer asked the assessee to file the information as to who has written these pages, to which concern/projects these documents are related, to reconcile the entries recorded in these documents with regular books of account and furnish the details of cash payment made by him as mentioned in the seized papers alongwith source. The assessee in its reply before Assessing Officer submitted that the scrutiny of the seized paper shows that same relate to purchase of material in respect of furnishing of some house. The projects of the assessee are still in initial stage and no additional construction is made. The papers have been made in the name of Micky, Solan and assessee has no concern in respect of that paper. 10(i) The Assessing Officer noted that assessee has disowned the document though the documents have been found from the possession of the assessee. The Assessing Officer referred to provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer in response to show cause notice as to why the same be not treated as unexplained expenditure under section 69C of the Act. Section 292C of the Act is applicable in the case of the assessee. It provides that, here any books of account, other documents, money bullion, jewellery or wither valuable articles or things are or is found in possession or control of any person in the course of search under section 132 of Income Tax Act, it may, in any proceeding under this Act, be presumed that such books of account, other documents, money, bullion, jewellery or other valuable articles or things belong or belongs to such person, the contents of such books of account and other documents are true and that the signature on every document to be in hand writing of such particular person . The presumption under section 292C is, however, rebuttable. It is, therefore, proved on record that when seized document was found during the course of search from possession of the assessee, that seized document belong to the assessee and that the contents of the documents are true and are in the hand writing of the assessee. The assessee did not file any evidence or material or specific explanation bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 46A of IT Rules which is certificate of the Secretary of Agriculture Produce Market Committee, Solan. The ld. CIT (Appeals) noted that issue is same as has been considered in assessment year 2006-07 and accordingly, dismissed this ground of appeal of the assessee. 18. Ld. Representatives of both the parties submitted that this ground is same as has been considered in assessment year 2006-07 on ground No. 1 on the basis of same seized document (A-3). Following reasons for decision in assessment year 2006-07, we set aside the orders of authorities below and delete the addition of ₹ 7,65,695/-. However, rejection of additional evidence by ld. CIT (Appeals) is confirmed. This ground is partly allowed. 19. On ground No. 2, assessee challenged the addition of ₹ 16,240/- under section 69C of the Act and in not admitting additional evidence under Rule 46A of IT Rule. The ld. CIT (Appeals) found that this issue is same as has been considered in assessment year 2006-07 and additional evidence is affidavit of Shri Javed Akhtar. The ld. CIT (Appeals), accordingly, dismissed this ground of appeal of the assessee. 19(i) Ld. Representatives of both the parties submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. The ld. CIT (Appeals), however, did not accept admission of the additional evidence and even on merit, confirmed the addition. 24. Ld. Representatives of both the parties submitted that this issue is same as have been considered on ground No. 2 in assessment year 2006-07 and 2007-08. Following reasons for decision on ground No. 2 in assessment year 2006-07 and 2007-08 (supra), we dismiss this ground of appeal of the assessee. 25. On ground No. 3, assessee challenged the addition of ₹ 18,77,319/- on account of estimation of net profit. Briefly the facts of the case are that Assessing Officer noted NP chart of the assessee for the assessment years 2007-08 to 2010-11 in assessment order and found that the net profit rate of the assessee for assessment year 2010-11 and 2009-10 (after excluding the surrender income of ₹ 25 lacs) comes to 1.80% and 1.60% respectively which is on lower side as compared to NP rates of the earlier years. The NP rate for assessment year 2007-08 and 2008-09 are 8.65% and 3.14% respectively. Therefore, claim of the assessee that he has not claimed any expenses against the surrendered income is not correct. The Assessing Officer asked t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njustified. The ld. counsel for the assessee contended that Assessing Officer has not rejected the books of account and no specific defects in maintenance of the books of account have been found. He has, however, admitted that during the course of search, assessee surrendered ₹ 25 lacs in assessment year under appeal. It would show that the book results declared by the assessee were not correct, otherwise, there was no reason for the assessee to have declare/surrender the additional income of ₹ 25 lacs. However, Assessing Officer merely on comparison of the NP rate of assessee from earlier years, made addition by rejecting the Profit and Loss Account to that extent. The Assessing Officer has not investigated and enquired into the explanation of the assessee given at assessment stage that there was higher expenses claimed in assessment year under appeal as compared to earlier years. No other reasons have been given by the Assessing Officer for re-casting the profit declared by the assessee. 28. Hon'ble Punjab and Haryana High Court in the case of CIT vs. K.S. Bhatia 269 ITR 577 held that, Mere fact that the profits were low compared to the earlier years was not a ..... 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