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TMI Blog2019 (6) TMI 1423X X X X Extracts X X X X X X X X Extracts X X X X ..... of the creditors have responded to the notices issued by the AO during the remand proceedings, the ld.CIT(A) has granted relief to the extent of 7.12 lakhs meaning thereby, the assessee could not prove the genuineness of the remaining creditors. CIT(A) was justified in partially sustaining the addition made by the AO on this issue. Addition made on account of low gross profit - AO noticed that the assessee has shown a gross profit margin of 0.24% only - HELD THAT:- We notice that the ld. CIT(A) was very much reasonable in reducing the gross profit estimate to 1%. Before us no material was placed by the assessee which would compel us to interfere with the order passed by the ld. CIT(A) on this issue. Accordingly, we confirm the order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end of the ld.CIT(A). Accordingly, we set aside the order passed by the ld.CIT(A) in respect of addition made u/s 40A(3) and restore the same to his file for fresh examination. Appeal of the revenue is treated as allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was showing outstanding balance in the name of various persons to the tune of ₹ 31.07 lakhs, which included amounts outstanding were in the name of 52 farmers to the tune of ₹ 23.44 lakhs. The AO asked the assessee to produce confirmation letters from the farmers. However, the assessee did not furnish the same and hence, the AO took the view that the assessee has failed to prove the genuineness of credits outstanding the in the name of farmers. Accordingly, he added the aggregate amount of ₹ 23.44 lakhs to the total income of the assessee. 6. Before the ld.CIT(A) the assessee furnished certain information and hence, the ld.CIT(A) called for a remand report from the AO. In the remand proceedings the AO issued summon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. Hence, the AO estimated the gross profit of the assessee at the rate of 5% of the sales and added a sum of ₹ 15.59 lakhs. In the appellate proceedings, the ld.CIT(A) reduced the estimate to 1% and accordingly granted partial relief to the assessee. 9. We have heard the parties on this issue and perused the record. We notice that the ld.CIT(A) has reduced the gross profit estimate made by the AO from 5% to 1% with the following observations; "The next ground of appeal is about gross profit addition. During the course of hearing in assessment proceedings the AO had noticed that the assessee has shown gross profit ₹ 81,987/- on turnover of ₹ 3,28,29,099/- which wok out to 0.24%. The AO stated in his order that the margi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the ld. CIT(A) on this issue. 11. The assessee also raised two legal issues namely, the AO has not supplied the reasons recorded for re-opening of the assessment and the AO has not mentioned in the assessment order that the approval from the competent authority was obtained. 12. We notice that the above said legal issues are vague and nothing was brought on record to show that the reason for reopening was not proper and the AO did not obtain requisite approval. In the absence of any material to support the legal issues raised by the assessee we have no other option but to dismiss them. 13. We shall now take up the appeal filed by the revenue wherein the decision of ld.CIT(A) in deleting the addition made u/s 40A(3) is being challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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