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TMI Blog2019 (8) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... as highly unjustified in holding that if books are not maintained presumptive rate of 8% should have been applied by the AO ignoring the fact on records that appellant has maintained Books of Accounts which are audited and as such case do not fall under the provisions of section 44AD of the Act. 4. BECAUSE, application of profit @ 8% is without any basis, evidence and is highly excessive and unreal in the light of facts of the case. 5. BECAUSE, upon overall consideration of the facts and in the circumstances of the case authorities below were highly unjustified in treating the 'Advance against Property' amounting to Rs. 3,00,00,000/- as 'Unexplained Cash Credits' without examining the Creditor, looking to its Books of Accounts and without any justifiable reason . The addition had been made and sustained purely on the consideration of suspicion and unfounded presumptions. 6. BECAUSE, alternatively, in any view of the matter no addition under section 68 can be validly made after rejecting the books of account as the credits pertains to same set of books which had been held unreliable by the learned 'AO' while framing assessment. 7. BECAUSE, alternatively, in any view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t relevant criteria and such a view has been approved in following cases by the Jurisdictional High Court: - a) ACIT vs. D. M. Brothers(2010) 44 DTR 0013 (All) (APB-57 -62) b) CIT vs. Target Construction Co. Ltd.(2015) 55 taxmann.com 294 (All)(APB-63-65) c) Pragati Engineering Corporation vs. ITO (Order dated 5.04.2013 passed by Hon'ble Allahabad High Court in ITA No. 11/2012)(APB 66-70). 6. He submitted that similar view has been followed by this Bench of the Tribunal in the case of:- a) ACIT vs. Jagdish Prasad Bansal (2012) 34 CCH 0446 (Agra) (APB 99 -102) b) Sri Devendra Kumar vs. ACIT (Order dated 31.08.2017 in ITA No. 495/Agra/2015)(APB 108 -119) c) Infra Developers Vs ITO, Order dated 30.03.2017 in ITA No. 52/Agra/2013(APB 120 -133) 7. The Ld. A.R thus submitted that in light of settled judicial position, learned CIT (Appeals) has erred in estimation of net profit disregarding past history and further placed reliance to the orders passed by the Agra Bench in the cases ofM/s Sri Siddheshwar Engineers India (P) Ltd 886 Takia Azad Gaan, Etawah Vs. ACIT- 5, Firozabad and Smt. ArchanaDutta, Mathura Vs ACIT, Circle-3, Mathura in ITA No. 330/Agra/2016. Copies o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es N.P rate of 2.04%. Thus, Net Profit of the assessee in filed Returns ranges from 1.88% to 2.04% in the consecutive three assessment years. In A.Y 2010-11, assessment was framed under section 143(3) of the Act vide order dated 2010-11 where income was estimated by application of N.P rate of 5.25%. However, the past history of the assessee on the basis of Returns filed ranges from 1.88% to 2.04% except in A.Y 2010-11 where assessee agreed for being assessed at 5.25%. Keeping in mind the entire factual matrix of the case and finding no evidence or reason for application of N.P rate of 8% we consider it fair, reasonable and logical to apply an average rate of two years referred above i.e (A.Y 2009-10 N.P rate of 1.88% and A.Y 2010-11 N.P rate of 5.25%) which gives N.P rate of 3.50% as against 2.04% shown by the assessee on turnover of Rs. 14,35,07,199/-. This view of ours is in conformity with the view recently adopted by the Division Bench of Agra ITAT, in ITA No. 330/Agra/2016, order dated 14.05.2018, in the case of Smt. Archana Dutta Vs ACIT, Circle-3, Matura for A.Y 2011-12 in which one of us was the party to the Bench. In this case after due consideration of past history averag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the learned Assessing officer that personal financial records pertaining to the creditor such as its ITR and bank statement may be obtained from the party directly. The learned Assessing officer acceding to the request of the assessee issued notice u/s 133(6) of the Act, obtained such details from the party as is evident from the discussion made in the assessment order. However, the AO held that the transaction did not appear to be genuine and made the addition of said amount to the income of the assesse. 15. He also submitted that Ld. CIT(A) further called upon documents from the assessee is respect of advance , which were furnished and Ld. CIT(A) remitted those evidences to the learned Assessing officer, request was also made to issue summons under section 131(1) of the Act, but on this occasion too no attempt was made to examine the creditor and assessee by that time has repaid the advance and it was under these circumstances that he requested for issue of summons. However, the authorities below without examining the creditor and without bringing any adverse evidence on assessment records on the basis of unilaterally drawn conclusions which were based on considerations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnish the confirmed copy of account M/s Easy Way Solution (P) Ltd. for A.Y. 2011-2012 bank statement for A.Y. 2011-2012 and copy of acknowledgement of ITR for A.Y. 2011-2012 failing which the amount of Rs. 3,00,00,000/- will be added in your income u/s 68 of the I.T. Act, 1961 which may be noted" 19. On the date appointed of 14.03.2014, assessee sought an adjournment as found noted in the order sheet of the ACIT, Circle-3, Mathura. Thereafter the case was transferred to ACIT, Circle-3, Mathura who issued fresh notice u/s 142(1) of the Act dated 14.03.2014 fixing compliance date on 20.03.2014 requiring the assessee to furnish the following in respect of credit of Rs. 3,00,00,000/- "You have shown current liability of Rs. 3,00,00,000/- in the name of M/s Easy Way Solution (P) Ltd. as on 31.03.2011. You were asked to give details alongwith confirmation of the above party, vide order sheet entry dated 24.01.2014 but you have not given the same. In this regard you are required to furnish the confirmed copy of account M/s Easy Way Solution (P) Ltd. for A.Y. 2011-2012 bank statement for A.Y. 2011-2012 and copy of acknowledgement of ITR for A.Y. 2011-2012 failing which the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unnotarized and unregistered in respect of property to be purchased in future and is not held by the assessee. Assessee is a Contractor not a builder. Thus, these all facts according to the learned Assessing officer proved that it not a genuine business advance. 23. However, as culled from the records and from the perusal of order sheet as made available by the Department in its paper book and notices which are reproduced in the Assessment order we found that no query of such nature was issued on the basis of which addition is made and sustained. Assessee was never put to notice in respect of grounds adopted for making the addition assessee was never called upon to prove the creditworthiness of the creditor. None of the point of objection on which Agreement is discarded was neither conveyed to the assessee nor was his explanation sought in this regard. No enquiry was made from the creditor in respect of points of doubts entertained by the learned Assessing officer. Therefore, the addition is based on considerations on which the learned Assessing officer never sought explanation from the assessee. Such an approach on part of the authorities below cannot be appreciated in law. 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing officer of the assessee is bound to accept the same as genuine when the identity of the creditor and the genuineness of transaction through account payee cheque has been established. 25. It is trite law in view of section 68 of the Act which creates a deeming fiction and which requires the assessee to prima-facie prove the three ingredients of the said section. (a) Identity of the Person (b) Genuineness of the transaction and (c) Creditworthiness of the Creditor 26. We noted that during the course of hearing before the Ld. CIT(A) assessee after furnishing written submission dated 07.09.2015 in response to the directions of Ld. CIT(A) vide his submission dated 16.10.2015 furnished following evidences in relation to property advance of Rs. 3,00,00,000/- (a) I.T. Return of Easyway Solutions (P) Limited for A.Y 2011- 12. (b) Computation of Income of Easyway Solutions (P) Limited for A.Y 2011-12. (c) Confirmation of Account duly signed by Director of Easyway Solutions (P) Limited confirming the transaction with the assessee. (d) Balance Sheet of Easyway Solutions (P) Limited for A.Y 2011-12. (e) Bank Account with BOB of Easyway Solutions (P) Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the evidence, Ld. CIT (A) has grossly erred in taking adverse view wherein she has altogether ignored to look into the creditworthiness of the company and the fact that its balance sheet disclosed advances of Rs. 5.50 croretowards land. If the authorities below entertained any doubt and required clarification with regard to any of the affair of the creditor in that eventuality summons under section 131(1) could have been issued which despite request made by the assessee was not issued.Failure to issue summons under section 131(1) on the request of the assessee in order to enable him to discharge his prima facie onus is fatal to the proceedings. Without such request, there is no duty cast on the Assessing Officer to issue summons under section 131, unless the Assessing Officer on its own deems it proper to do so. But as soon a request is made, it becomes incumbent on the Assessing Officer to issue such summons in order to enable the assessee to avail of such opportunity. After such issuance of summons, if those were not responded to or returned without service, the Assessing Officer is free to take his own decision as he may deem fit and proper. Such action of the authorities below ..... 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