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TMI Blog2022 (3) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... d purchase of turmeric, which also included a sum in the name of Sh. Kailash Gidwani HUF account. In view of the fact that the transactions of the assessee concerning purchase and sale of Turmeric were genuinely conducted through Sh. Bharat Nilakhe, in the same way in which he did with other more than 100 traders in Sangli, genuineness of all of which has been accepted by the Department, there is no logic in making or sustaining the additions in the hands of the assessee, which are just off shoot of such a trading activity. These additions are directed to be deleted. Addition of deemed dividend u/s.2(22)(e) - CIT(A) directed the AO to verify his records and if the transaction related to previous year relevant to the assessment year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee declared total income of ₹ 7,32,960/- from Turmeric trading activity. Gross profit of ₹ 13,12,990/- was shown from Turmeric trading, which was reduced by deduction towards direct expenses and indirect expenses, resulting into net profit of ₹ 8,40,123/-. The AO observed that the so-called Turmeric trading activity was not supported by any evidence, such as, L.R. Nos., Storage receipts, Freight/Transport receipts and Hamali charges receipts etc. He, therefore, treated the entire gross profit of ₹ 13,12,990/- as unexplained cash credit u/s.68 of the Act. 4. The second issue which is also connected with the first issue is about the addition of ₹ 17,67,880/-. When the AO was dealing with the taxability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appended at page 4 of the paper book, which shows Direct income of ₹ 13,12,990.30 (Turmeric trading). Thereafter, there is deduction towards Commission and Hamali with the gross profit coming to ₹ 12,60,590/-. Then, the assessee claimed deduction towards Indirect expenses, namely, Petrol, Professional fees and Vehicle expenses etc. and ultimately came out with a figure of net profit of ₹ 8,40,123/- This amount of ₹ 8.40 lakh was offered by the assessee for taxation. The assessee s case is that such income was mainly earned from purchase and sale of turmeric, being, the business activity carried on through Sh. Bharat Nilakhe, who was making purchases and sales on behalf of the assessee and paying the net profit to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny addition to the returned income . It has further been stated that all of them substantiated their cases with relevant evidence, which the assessee could not. I am unable to appreciate the view point of the AO in making addition of the gross commission in the hands of the assessee alone on the ground that the transactions with Sh. Bharat Nilakhe were not genuine, when similar transactions undertaken by him with around 100 traders situated at Sangli were accepted by the respective AOs as genuine. Once the transactions relating to Turmeric trading activity were fully disclosed by the assessee with the corresponding Profit of ₹ 8.40 lakh, I am unable to comprehend the view point of the AO that the entire gross commission of ₹ 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same as deemed dividend u/s.2(22)(e) of the Act. The assessee contended before the ld. CIT(A) that this amount was actually received in the preceding year and was also subjected to tax during such earlier year and that no fresh advance was received during the year relevant to the assessment year under consideration. The ld. CIT(A) directed the AO to verify his records and if the transaction related to previous year relevant to the assessment year 2009-10, then no addition should be made. 8. Having heard the rival submissions and perused the relevant material on record, it is seen that the assessee contended before the ld. CIT(A) that the sum in question was received and taxed in the immediately preceding year. The ld. CIT(A) sent th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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