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TMI Blog2018 (1) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... l on record to the declared gross profit on the declared turnover, the enhancement of the G.P. is unjustified. Therefore, the addition sustained by the ld. CIT(A) is deleted. Addition U/s 68 - Held that:- After considering the relevant documents submitted by the assessee, the Bench is of the view that the assessee was able to discharge the onus as casted upon by Section 68 of the Act for establishing the identity, creditworthiness and genuineness of transactions. It is also a fact that the assessee has received the amount by cheque from Shri Suresh Chand. Shri Suresh Chand has also explained the source of source from where the amount was received by him in his bank account on the maturity of FDR maintained with Dholpur Urban Cooperative Bank Ltd. against which he got banker’s cheque which was deposited in his account and the same was source of ₹ 10 lacs given by him to assessee. Considering all these facts and circumstances, the addition to the extent of ₹ 10.00 lacs is deleted. No pleadings were made for the balance addition U/s 68 of the Act of ₹ 27,500/-, therefore, addition to that extent is confirmed. - ITA No. 784/JP/2016 - - - Dated:- 9-1-2018 - SHRI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is judiciously obligatory on the part of the department also to accept the audited accounts for tax purposes and invoking provision of section 145(3) without valid reasons and thus and therefore rejection of books of accounts is without any evidence / material on record. 4. That on the facts and in the circumstances of the case Ld. CIT(A) Alwar has grossly erred in law and facts in not issuing proper valid show cause notice before making best judgment assessment order additions / disallowance. 5. That on the facts and in the circumstances of the case Ld. CIT(A) Alwar has grossly erred in law and facts in confirming addition of unsecured loan ₹ 10,27,500/- u/s 68 of the IT Act and further erred in not accepting affidavit of Suresh Chand dully Attested by NOTARY PUBLIC. 6. That on the facts and in the circumstances of the case Ld. CIT(A) Alwar has grossly erred in law and facts in charging u/s 234B ₹ 2,42,620/- 234C ₹ 4,402/-. 5. In the grounds No. 1 to 4 of the appeal, the assessee has challenged the estimating the income after rejecting the books of account, which has been reduced by the ld. CIT(A). While pleading on behalf of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of books of account was completely unjustified. Reliance was placed on the following case laws:- 1. Namasi Vayam Chattior vs. CIT, (1960) 39 ITR 579 SC 2. (1954) 26 ITR 159 (Punj.) 3. (1960) 38 ITR 152 (Ker.) 4. (1975) 101 ITR 721 (J K) 5. Similar view has been taken in following cases a. (HC), 80 Taxman 184 (Gau,) 6. (HC) [2010], 325 ITR 13 (Del,). In this case, the Hon'ble Delhi High Court has held as under: The accounts which are regularly maintained in the course of business and are duly audited, free from any qualification by the auditors, should normally be taken as correct unless there are adequate reasons to indicate that they are incorrect or unreliable. The onus is upon the Revenue to show that either the books of account maintained by the assessee were incorrect or incomplete or that the method of accounting adopted by him was such that true profits of the assessee cannot be deducted there from. The assessee has further relied upon the following decisions: The Hon'ble Jodhpur IT AT in the case of Ganesh Foundry Vs Incometax Officer. It has held that correctness of book results cannot be challenged without p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd commission agent of oil seed, food grain and floor. The assessee filed return of income alongwith audited accounts. The Assessing Officer rejected the books of account and estimated the gross profit. The ld. CIT(A) accepted the turnover declared by the assessee by holding that the Assessing Officer has failed to bring on record any adverse material to justify the quantification of undisclosed turnover. However, he reduced the G.P. estimation from 8.5% to 8% on the declared turnover. The facts on record shows that this estimate of G.P. @ 8% was not based on any specific defects noted by the Assessing Officer or by the ld. CIT(A) in the expenses claimed in the P L account. Once the ld. CIT(A) has accepted the declared turnover of the assessee in absence of any specific defects and without specifying any defects in the books of account in estimating the G.P. @ 8% is also not justified. Keeping in view the various decisions relying upon by the ld AR, the Bench is of the view that the assessee was maintaining books of account, which were duly vouched. No specific defect has been pointed out by any of the authorities below. In absence of any contrary material on record to the declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for explaining the genuineness of cash credit. [Pradeep kumar Himmatramka Vs. ITO (2002) XXVII Tax world 392 (JP)] (b) Assessee establishing identity of the creditors and amount received by him by way of cheques. Assessee must be taken to have provide that the creditor had creditworthiness. Amount not includible in hands of assessee as income from undisclosed sources on mere failure on pat of the creditors to show their sub-creditors had creditworthiness. [ Kothari Vs CIT (2003) 264 ITR 234 (Gauhati) (c) Identity of creditors proved return of creditors showing loans accepted and assessed as income of the assessee. [Jalan Timber Vs. CIT (1997) 233 ITR II (Guahati)] (d) Creditor identifiable, income tax assessee, having filed confirmation letter and affidavit confirming the advancing loan to assessee and having shown loan entries in their respective balance sheets filed with the return, addition cannot be made on ground that loan creditor were not produced before AO. [ACIT Vs. India Tyre House (2001) 72 ITJ (Gauhati) 316] (e) Assessee is not supposed to prove the source of the source of credit of the creditor. [Sideways Investments Pvt. Ltd. Vs. DCIT (2000) XXIV Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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