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TMI Blog2017 (12) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... sources as per return of income amounting to ₹ 90,256. However, there is no finding that said figures includes the figure of ₹ 48,231. Hence, the matter is remanded back to the file of the AO to examine the same and where it is found that the figure of ₹ 90,256 already includes the figure of ₹ 48,231, allow the necessary relief to the assessee as the same income cannot be brought to tax twice. In the result, the ground of appeal is allowed for statistical purposes. Disallowance of deduction u/s 80C - CIT(A) observed that no documents or supporting evidences have been furnished either in assessment proceedings or in the appellate proceedings - AR submitted that evidence regarding investment eligible for deduction u/s 80C were never demanded by AO or ld. CIT(A) and the addition evidence regarding said investment in form of LIC receipt and tuition fees has now being submitted and the same may kindly be admitted - Held that:- In light of the same, the evidence in support of deduction under section 80C is admitted and the matter is remanded back to the file of the AO to examine the same a fresh after providing reasonable opportunity to the assessee. The groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the nature of deposits. We find that the assessee in its ground no. 2 has also challenged the sales figures of ₹ 3,52,40,960/- instead of ₹ 3,40,35,960/- as shown in the audit report and in ground no. 3, assessee has challenged the estimation of net profit of 5% as against 1.75% declared by the assessee. Since all these grounds involved identical facts, the same are being disposed off together. 3. Briefly, the facts of the case are that during the course of assessment proceedings, it was found by the Assessing officer that the assessee had maintained various bank accounts in his name and his proprietorship concern M/s Shyam Poultry Farm however only one account maintained with Bank of Maharashtra, Govindgarh was furnished on 24.06.2013 and no further explanation was furnished by the assessee. The AO accordingly held that bank deposit does not stand verified and all the credit entries appeared in the said bank accounts amounting to ₹ 4,39,72,094/- were added to the total income of the assessee as unexplained cash credits u/s 68 of the I.T. Act, 1961. 4. Being aggrieved, the assessee carried the matter in appeal before CIT(A). The ld. CIT(A) accepted the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of Return of advance from Maulana Poultry, increase in loan/liability of ₹ 15,59,892 and net effect of other contra entries of ₹ 21,12,378 are verifiable and allowed. However, the claim of opening cash of ₹ 3,80,000 and opening debtors of ₹ 8,25,000 are not verifiable since no books of account have been maintained for any preceding year. Thus these amounts would enhance the figure of sales of ₹ 3,40,35,960 as per audit report. The sales are accordingly enhanced to ₹ 3,52,40,960. This means that out of total cash deposits of ₹ 4,37,07,862/- in the bank accounts of the assessee, Cash deposits amounting to ₹ 3,52,40,960/- represent the sales of poultry products for the current year. The fact that cash deposits in the assessee s accounts are mostly on account of sales proceeds has been recognized by the AO in assessment u/s 143(3) for AY 2013-14 also. 4.6 After ascertaining the correct sales as above, the next question which arises is regarding computation of profit on such sales. It is seen that much of purchases made by the assessee for his poultry business are through RTGS payments to various suppliers, the confirmatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d imposed the penalty u/s 271A, 271B without having any books of accounts. (e) After making all the additions/credit entry as income, the Ld. AO again added the income as declared by the assessee. Simultaneously using his quasi-judicial skill, he again ignored the expenses as claimed by the assessee and assessed the income for the year at ₹ 4,50,50,380. Interestingly when the ld. AO has added all the credits, where is the room he felt left for remaining income. 6. Regarding sales figures of ₹ 3,52,40,960 taken by the ld CIT(A) instead of ₹ 3,40,35,960, the ld. AR submitted that the assessee had submitted the audited financials, books of accounts and vouchers relating thereto before the ld CIT(A). The assessee further submitted the reconciliation of cash/cheque deposited in the bank accounts as under:- Sales proceeds 3,40,35,960 Inter transfer entry 41,31,632 Opening Cash 3,80,000 Opening Debtors 8,25,000 RTCG/NEFT Failure 4,00,000 Advance Return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e spirit of law and this fact is also confirmed by following judicial pronouncements: Haridas Parikh V ITO [2009] 29 SOT 13 (JODH)(URO) Ashok Kumar Co. v. ITO [2004] 2 SOT 518 (Asr.) (SMC) Imran Ahmed v. CIT [1982] Tax LR (NOC) 111 (All.) Hemraj Nebhomal Sons v. CIT [2005] 146 Taxman 345 (M.P) Asstt. CIT v. L.M.P. Tractors (P.) Ltd. [2005] 148 Taxman 52 (Mag.) Malani Ramjivan Jagannath v. Asstt. CIT (Rajasthan-HC) Income Tax Officer vs. Girish M. Mehta [2008] 296 ITR (AT) 125 (Rajkot ) 8. Regarding estimation of net profit rate of 5% by the ld CIT(A) instead of 1.5% as disclosed by the assessee, the ld. AR submitted that:- (1) The assessee was engaged in the business of sale and purchase of chicks and poultry feed. Sales are made to farmers and Butchers. The assessee purchase broiler from hatcheries and poultry feed from farmers as well as from industrial units. The assessee sold broiler to marginal farmers and poultry units and after 40-45 days the assessee purchase these already supplied broilers from the farmers/poultry units and sale them to butchers. The selling rate is market dependent and quoted ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails so called for by the AO to verify the bank credits and accordingly, in absence of necessary explanation, the AO has added the same as unexplained cash credit in the hands of the assessee. 10. We have heard the rival contentions and perused the material available on record. We find that the AO has brought to tax the credit entries appearing in the assessee s bank accounts in absence of necessary explanation on the part of the assessee. During the appellate proceedings before the ld CIT(A), the assessee has submitted the audited financial statements, which, as pointed out by the ld CIT(A) as well as by ld DR during the course of hearing, have been audited subsequent to completion of assessment proceedings and other details in terms of bank reconciliation statements and other support documentation in terms of purchase confirmations, etc. The same were admitted as additional evidence after seeking the remand report from the AO. The ld CIT(A) observed that the AO in his remand report has only commented partially on certain matters and thereafter, invoking his co-terminus powers examined the relevant facts and related documentation having a bearing on the matter especially the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equally vague and doesn t throw any light on the extent of purchases made during the year in cash and which remains unverified. At the same time, given the inherent nature of the assessee s business, where purchases are also made from farmers, cash transactions cannot be ruled out. Further, regarding non-maintenance of stock register, the ld AR submitted that there are no opening and closing stock during the year and what has been purchased during the year, the same has been sold during the year, hence, there was no necessity to maintain the stock register and the same cannot be a basis for rejection of books of accounts. We find that the assessee is in the business of purchase and sale of chicks and poultry feed. Sales are made to farmers and Butchers. The assessee purchase broilers from hatcheries and poultry feed from farmers as well as from industrial units. The assessee sold broiler to marginal farmers and poultry units and after 40-45 days the assessee purchase these already supplied broilers from the farmers/poultry units and sale them to butchers. In our view, given the nature of business of the assessee and the turnover of ₹ 3,40,35,960 reported during the year, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the necessary evidence regarding agriculture income were never demanded by the either AO or by the ld. CIT(A). However, the same are being submitted now in form of copy of jamabandi and proof of agriculture income and the same may kindly be admitted. The ld DR fairly submitted that the matter may be remanded to the AO for verification. In light of the same, the evidence in support of agriculture income is admitted and the matter is remanded back to the file of the AO to examine the same a fresh after providing reasonable opportunity to the assessee. The ground is thus allowed for statistical purposes. 16. In ground No. 4, the assessee has also challenged the action of ld. CIT (A) in considering the interest income of ₹ 48,231 as income from other sources. In this regard, the ld. AR has submitted that interest income was already declared while calculating business income, Net profit and disclosed in audited profit and loss account and same may be deleted. From perusal of assessment order, we noted that the AO has brought to tax income from other sources as per return of income amounting to ₹ 90,256. However, there is no finding that said figures includes the figure o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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