9911796707
TMI Blog2022 (5) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... unt in term of section 44AA of the Act and has not got them audited u/s.44AB of the Act and filed with the AO - this is uncontroverted claim that the hard disk contains incriminating material having bearing on the determination of income on account of unaccounted indirect expenditure, peak cash credits, sundry loan creditors added u/s.68 of the Act, bogus purchases and unexplained investment in property. We find that this is a common feature in all the assessees cases and once this is the fact, we noted that the AO has rightly assumed jurisdiction u/s.153A or 153C - Decided against assessee. Addition of indirect expenditure - AO estimated the expenditure and disallowed 25% of the expenditure - CIT(A) restricted the disallowance at 10% - HELD THAT:- As assessee has made a claim before the AO and before CIT(A) that the accounts of the group concern is statutorily audited and the respective business owners i.e., the assessee, his wife and his mother have duly filed Form No.3CB 3CD, as audited by the auditor. It was claimed that the books of account of the assessee is statutorily audited and duly filed by the assessee. The assessee before CIT(A) claimed that the AO never questioned the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the issue of sundry creditors as unexplained cash credit u/s.68 of the Act. The CIT(A) observed in para 16.3 that this Rs.6 lakhs loan has already been confirmed as addition as sundry loan creditor in assessment year 2007-08 and now this was deleted for giving credit to the extent of Rs.6 lakhs as impugned investment of Rs.7.5 lakhs in M/s. Shree Battery House, as there is source to that extent is available with the assessee. CIT(A) in the absence of same confirmed the balance Rs.1.5 lakhs as unexplained investment from unaccounted income. Hence, we find no infirmity in the order of CIT(A) and hence, this issue of assessee s appeal is dismissed. Addition of unexplained credit u/s.68 of the Act received from Shri Dharmichand Jain - HELD THAT:- We noted that this amount of Rs.6 lakhs from Shri Dharmichand Jain claimed by assessee but no details were filed to prove the identity, creditworthiness and genuineness of transaction. Even now before us the assessee could not discharge his onus to prove the transaction and therefore, we uphold the order of CIT(A) confirming the addition of Rs.6 lakhs. It is to be noted that this Rs.6 lakhs is doubly added by AO and we have already con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not produced any evidences for deletion of addition of incentives received by assessee.This issue of assessee s appeal is dismissed. Penalty u/s.271A for non-maintenance of books of account - AO levied penalty despite the fact that the assessee contended that the assessee have maintained books of accounts and got them audited u/s.44AB - HELD THAT:- We noted that only seized material found during the course of search is a hard disk i.e., document in the form of incomplete tally package inventories as ANN/SR/RJ/hard disc/S dated 22.5.2012 having bearing on the determination of the total income were recovered. This is incomplete tally package of documents i.e., sales, purchase but no books of account are maintained. Even now before us, the ld.counsel admitted that there is no books of account and assessee could not produce any books of account before us despite specific opportunity given. Hence, we are of the view that the lower authorities have rightly levied penalty for non-maintenance of books of account u/s.271A . X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal papers were gathered and due to frequent change of counsels, these appeals were filed belatedly by 138 days as argued by ld.counsel. 2.1 When these facts were confronted to ld. Senior DR, he only opposed the condonation of delay but could not controvert the above fact situation. In this group of appeals, he stated that in all the appeals, there is a delay ranging from 7 days to 138 days and it is not possible that all the appeals were filed with a delay without reasonable cause. In term of that, the ld. Senior DR opposed the condonation of delay. 2.2 We have heard rival contentions and gone through the condonation petition along with affidavit. We have gone through the reasons cited by ld. counsel and noted that the reasons seems sufficient in view of the length of the delay i.e., 7 days to 138 days in all these appeals. As the assessee is able to explain the delay, hence we condone the delay and admit these appeals for adjudication. This decision will apply in all the appeals for condonation of delay. 3. First, let us take the following 8 appeals regarding quantum addition and where the assessees have raised the jurisdictional issue that these assessments are unabated an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner of Income Tax (Appeals) erred in not recognizing the fact that all the information in that hard disk was already available with the Revenue in the form of Audited Financial Statements of the appellant. 3.4 Brief facts are that Shri Shanthilal D Jain is a dealer in various batteries, inverters and UPS of different brands and he is proprietor of M/s. Shri Dharma Battery House and M/s. Shree Battery House (which is one of the group companies under adjudication) and assessee's wife Smt. Sharmila D Jain is also engaged in the same business. On 22.05.2012, a search took place on the residential and business premises of the assessee. During the course of search, the search party found one hard disk containing Tally details of purchases and sales which were seized. Accordingly, in all these cases notices u/s.153A was issued and accordingly, search assessments u/s.153A r.w.s. 143(3) of the Act, were completed for the assessment years 2007-08 to 2012-13. The AO in each of the assessment years has made additions, which are tabulated by the AO, which reads as under:- A.Y. NATURE OF ADDITIONS MADE IN THE ASSESSMENT ORDER FOR THE IMPUGNED AYs 2007-08 Indirect expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) for the assessment year 2007- 08 in the case of Shri Shanthilal D Jain adjudicated this issue vide para 7.30 & 7.31 as under:- 7.30 Without prejudice to the above, it is pertinent to note that the AO has referred to hard disk which was seized vide Annexure AA/SR/RJ/Hard Disk/S representing inconsistency in the pattern of expenditure claimed by all the business concerns viz., (i) Shree Dharma Battery (ii) Shree Battery House (iii) M/s. Shree & (iv) M/s. Shreyans Power and these concerns are controlled and managed by the appellant Mr. Shanthilal. The hard disk containing incomplete tally package which was recovered during the course of search throws light on the subject matter of additions and are thus incriminating materials having bearing on the determination of income. 7.31 The appellant has contended that the assessment is untenable as the AO has concluded that books of account were not maintained and thus could not have resorted to assessment u/s 153A of the Act. The AO has referred to the averments made by the appellant to the effect that he had not maintained regular, contemporaneous and completed books of account; that he maintains only purchase and sales account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f group cases regarding these two penalties agitated by assessee, the ld.counsel admitted that in these two penalties, the assessee has not maintained the books of account and hence, penalty u/s.271A can be uphold in relation to abated assessments but ld.counsel requested that in regard to unabated assessments, the issue is as regards to assumption of jurisdiction in view of the decision of Hon'ble Bombay High Court in the case of Continental Warehousing Corporation, supra. The ld.CIT-DR contented that the assessee before CIT(A) could not explain the nature of additions made in the relevant assessment years in regard to addition of cash credits, sundry loans and creditors added u/s.68 of the Act and bogus purchases. The ld.counsel for the assessee in reply further reiterated the same arguments. 3.9 We have heard rival contentions and gone through the facts and circumstances of the case. We noted that the assessee before AO as well as before CIT(A) could not explain how the transactions recorded in the hard disk which was seized vide Annexure ANN/SR/RJ/Hard Disc/S representing inconsistency in the pattern of expenditure, additions of cash credit, sundry loan creditors u/s.68 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lained Inv. In property 2010-11 -do- -do- -do- -do- -- Trading in Scrap 2011-12 -do- -do- -do- -do- 2012-13 -do- -do- -do- -do- 2013-14 -do- -do- -do- The ld.counsel for the assessee as well as the ld.CIT-DR agreed that facts and circumstances in all the cases are exactly identical and addition is based on only one seized document i.e., one hard disk containing tally details of purchases and sales, indirect expenditure, incentives, peak cash credits, transfer from personal books, sundry loan creditors added u/s.68 of the Act, bogus purchases and unexplained investment in property. The ld.counsel for the assessee stated that the facts can be taken from the case of Shri Shanthilal D Jain for the assessment year 2007-08 in ITA No.2357/Chny/2019 and issue can be decided. 5. The first issue in these appeals of ITA Nos.2357 to 2363/Chny/2019 is as regards to addition made by the AO of indirect expenditure and confirmed by the CIT(A). For this, assessee has raised following Ground Nos.8 & 9:- "8. For that without prejudice to the above, the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer ought to have accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, books of account and are required to substantiate that the expenditures claimed by them by way of demonstrating that they had incurred expenditure; incurred expenditure to the extent they claim that was laid out;. and that they were incurred wholly and exclusively for the purposes of their business. 10.3.1 The duty is cast on the appellant in discharging his burden of proof by furnishing reasonably full details/particulars that are verifiable by the AO in terms of these main provisions and other deeming provisions. It is relevant to note that the expenditure claimed by the appellant would be receipts in the hands of third parties concerned i.e. service providers and the trail of payments would help the Revenue in tracking those cases to examine whether they offer income from out of the receipts in their hands emanated from out the impugned expenditure stated to have been incurred by the appellant. This is facilitated by various mechanisms such as TDS, disallowance of expenditures incurred in cash in excess of the prescribed threshold. In this case, as observed earlier, the appellant had not maintained regular and contemporaneous books of account supported by documents, vouch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utorily audited and duly filed by the assessee. The assessee before CIT(A) claimed that the AO never questioned the statutory audit and disallowance made in regard to indirect expenditure on estimate basis. We noted that the CIT(A) simply estimated the disallowance at 10% as against estimated by AO at 25%. But, now the question arises that the assessee is unable to produce the books of account and even now before us, despite specific opportunities given, no books of account or audited accounts were produced. Even, the assessee on merits has not made any argument or has not made any claim. In such circumstances, we have no hesitation in confirming the action of the AO and that of the CIT(A). Hence, the order of CIT(A) is confirmed and this issue of assessee's appeals is dismissed. Similar are the facts in other 6 appeals and hence, this decision will apply in all these 7 appeals i.e., ITA Nos.2357 to 2363/Chny/2019 for assessment years 2007-08 to 2013-14. 6. The next issue in these appeals is as regards to addition made by AO and confirmed by CIT(A) in regard to incentives received by assessee in assessment years 2007-08 to 2010-11 in ITA Nos.2357 to 2360/Chny/2019. The facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the incentives and scrap values. Therefore, as the assessee did not account these incentives as his income, the same was calculated from the ledger account submitted by M/s Exide Industries and brought to tax. Therefore, in the absence of books of accounts, the AO did not find any alternate except to add the incentives. The appellant could not demonstrate that he had offered the incentives correctly to tax by adducing evidence even before the undersigned. In view of the appellant's failure, I hold that the AO's action on this issue is in order. The appellant's ground is dismissed. Aggrieved assessee is in appeal before the Tribunal. 6.2 We noted that the assessee is not maintaining any books of account and the information received is from seized hard disk containing tally details of purchases and sales seized from the business premises of the assessee pursuant to the search u/s.132 of the Act on 22.05.2012. Now, before us the ld.counsel for the assessee has not made any argument in regard to the merits of the case, whereas the ld.CIT-DR relied on the order of CIT(A). Once the assessee has not maintained any books of account nor any bills and vouchers and despite number of opportu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears as under:- A.Y. 2007-08 Rs.19,76,020/- A.Y. 2008-09 Rs.44,53,926/- A.Y. 2009-10 Rs.21,86,790/- A.Y. 2010-11 Rs.15,690/- A.Y. 2011-12 Rs.2,46,650/- A.Y. 2012-13 Rs.17,81,603/- Total Rs.1,06,60,679/- Aggrieved assessee preferred appeal before CIT(A). 7.2 Before CIT(A), the assessee contented the same argument that the assessee is a wholesale dealer dealing in batteries and agency of Exide Industries. He explained that these amounts deposited in the bank account i.e., South Indian Bank during the above stated period is out of sale proceeds. The CIT(A) after going through the submissions confirmed the action of the AO vide para 12.3 & 12.4 as under:- 12.3. The appellant, during the course of appeal proceedings, has stated that the deposits are part of sales turn over; that all the impugned deposits are not by way of cash. The appellant has further sought to plead that the deposits are much less than the turn over. The appellant further went on to say that the appellant is a wholesale dealer and hence there is negligible scope to deal in cash. The appellant has made only grand and ideal statements without adducing any evidence in respect of the material iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posits in his accounts. 12.4. In view of the failure on the part of the appellant and keeping in view the facts narrated above and hi absence of any supporting corroborative evidences, the A.O. was justified in making addition of peak cash credit of. Rs.19,76,020/-, Rs.44,53,926/-Rs.21,86,790/- Rs.15,690/-. Rs.2,46,650/- & Rs.17,81,603/- for AYs. 2007-08 to 2012-13. Accordingly, the order of the A.O. is confirmed on this ground. The appellant's ground is dismissed. Aggrieved now assessee is in appeal before the Tribunal. 7.3 We have heard rival contentions and gone through the facts and circumstances of the case. Before us, the ld.counsel for the assessee has not made any argument except that the cash deposit in South Indian Bank is on account of sale proceeds. But on query from the Bench, could not produce any books of account or evidences or source of cash deposit in the bank. Once there is no books of account, how the assessee can make a claim that the cash deposits are arising out of sale proceeds or he could not link the same with the sales made by producing any evidence. In such circumstances, we have no alternative except to confirm the addition. This issue of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan creditor in assessment year 2007-08 and now this was deleted for giving credit to the extent of Rs.6 lakhs as impugned investment of Rs.7.5 lakhs in M/s. Shree Battery House, as there is source to that extent is available with the assessee. The CIT(A) in the absence of same confirmed the balance Rs.1.5 lakhs as unexplained investment from unaccounted income. Hence, we find no infirmity in the order of CIT(A) and hence, this issue of assessee's appeal is dismissed. 9. The next issue in assessee's appeal in ITA No.2357/Chny/2019 for the assessment year 2007-08 is as regards to the order of CIT(A) confirming the action of AO in making addition of unexplained credit u/s.68 of the Act received from Shri Dharmichand Jain to the extent of Rs.6 lakhs. For this, assessee has raised following Ground No.12:- 12. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer ought to have added the borrowing made by the appellant from his father Late Shri Dharmichand Jain to the extent of Rs.6,00,000/- as unexplained cash credit u/s.68. The provisions of section 68 cannot be invoked in the facts and circumstances of the case. 9.1 Brief facts are that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - A.Y. 2007-08 Rs.18,869/- A.Y. 2008-09 Rs.38,869/- A.Y. 2009-10 Rs.38,869/- A.Y. 2010-11 Rs.66,456/- A.Y. 2011-12 Rs.1,13,034/- A.Y. 2012-13 Rs.51,903/- A.Y. 2013-14 Rs.51,903/- Even now before us, the assessee could not produce any evidence or no argument was made in this regard and hence, the same is dismissed. This issue of assessee's appeals is dismissed. Similar are the facts in other appeals for assessment years 2008-09 to 2013-14 and hence, this decision will apply in all those appeals. 11. The next common issue in ITA Nos. 2358 to 2360/Chny/2019 for assessment years 2008-09 to 2010-11 is as regards to the order of CIT(A) confirming the action of AO in estimation of profit@ 10% on sale of old batteries i.e., trading in scrap. The facts and circumstances in all these three assessment years are identical and hence, we will take the facts from the assessment year 2008-09 and will decide the issue. For this, assessee has raised following Ground Nos. 11 & 12 in assessment year 2008-09 in ITA No.2358/Chny/2019. 11. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the profit margin on sale of old batteries were always in the rang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant's ground is partly allowed. Aggrieved assessee came in appeal before the Tribunal 11.2 We have heard rival contentions and gone through the facts and circumstances of the case. Before us, the ld.counsel for the assessee has not argued on merits or plea was made as regards to reduction in profit rate, hence we find no infirmity in the order of CIT(A) and the same is confirmed. The order of CIT(A) is confirmed on this issue. Accordingly, this issue of assessee's appeals for assessment years 2008-09 to 2010-11 is dismissed. 12. The next issue in assessment year 2009-10 in ITA No.2359/Chny/2019 is as regards to unexplained investment in property. For this, assessee has raised following Ground Nos.13 & 14:- 13. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer ought not to have considered the gifts received by the appellant from his relatives as unexplained investment / unexplained credit. 14. For that the Commissioner of Income Tax (Appeals) failed to appreciate that gifts received from relatives is exempt from taxation. The Commissioner of Income Tax (Appeals) erred in disregarding the gift deeds produced by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that even now before us, the ld.counsel for the assessee has not made any argument on merits and has not tried to file any evidences to prove the genuineness of gift or cash credit. Hence, we find no infirmity in the order of CIT(A) and the same is confirmed. This issue of assessee's appeal is dismissed. 13. The next common issue in these 4 appeals in ITA Nos. 2357, 2361, 2362 & 2363/Chny/2019 for assessment years 2007-08, 2011-12, 2012-13 & 2013-14 is as regards to the order of CIT(A) confirming the action of AO making addition of unexplained cash credits u/s.68 of the Act. The facts and circumstances in all these assessment years are identical and hence, we will take the facts from the assessment year 2011-12 in ITA No.2361/Chny/2019 and will decide the issue. The ground raised by assessee reads as under:- 10. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer ought not to have added Rs.15,78,600/- as unexplained cash credit u/s.68. The provisions of section 68 cannot be invoked in the facts and circumstances of the case. 13.1 The AO in assessment year 2007-08 added a sum of Rs.6,00,000/-, in 2011-12 added a sum of Rs.15,78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 13,00,000/- that has been held as non-genuine in A.Y.2011-12 by the undersigned). The issue is to be decided is whether the addition under Section 68 had rightly been made or not. As per section 68, when a cash credit entry appears in the appellant's accounts, the appellant is under legal obligation to explain the same that too to the satisfaction of the A.O. In case the appellant did not offer any explanation or fails to tender evidence or burkes an enquiry then the A.O. can hold that income as income from undisclosed sources. It is thus, imperative for the appellant to prove prima facie the transactions, which resulted in sundry credit. Such proof includes proof of identity, capacity of creditors to advance and genuineness of the transaction. In case these three basic ingredients have been proved then only the onus would have been treated as discharged whereas in the present case, the cumulative satisfaction of all three limbs has not established. The AO is right in bringing Rs.37,00,000/- to tax. 16.12.1. Similarly, in the case of credit purported to have been received during the year from Shantilal (HUF) amounting to Rs. 12,00,000/-, the appellant has not produced any e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years 2010-11 to 2013-14 is as regards to the order of CIT(A) confirming the action of AO in making addition of indirect expenditure. For this, assessee has raised following Ground Nos.7 & 8:- "7. For that without prejudice to the above, the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer ought to have accepted the indirect expenditure claimed by the appellant. 8. For that the Commissioner of Income Tax (Appeals) erred in disallowing 50% of the disallowance made by the Assessing Officer towards indirect expenditure, that too on an arbitrary basis, disregarding the fact that the accounts of the appellant are duly audited u/s.44AB of the Income Tax Act, 1961" 15.1 At the outset, it is noticed that this issue also arose in the 7 appeals of Shri Shanthilal D Jain and the same was dealt by the Bench and the order of CIT(A) restricting the disallowance at 50% of the amount disallowed by AO. The AO made disallowance at 25% of expenditure in all the assessment years and the CIT(A) restricted further 50% of the amount disallowed by the AO by observing in para 10.4 as under:- 10.4 On appraisal of the facts of the case, materials on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or could not controvert the same. Hence, the CIT(A) confirmed the action of AO in making addition of incentive by observing in para 11.3 as under:- 11.3 I have given careful consideration to the issue on hand. The assessee was engaged in the trade of batteries and Inverters. Since the assessee was not maintaining any books of accounts, the AO called for the ledger account of the assessee entered in the books of M/s Exide Industries. On verification of the ledger account of the assessee in the books of M/s Exide Industries, it was noticed that, the appellant has received incentives apart from the cash discount while purchasing the batteries from M/s Exide Industries. But these incentives were not accounted for in his books. Instead, M/s Exide Industries adjusted these incentives against the scrap sold by the appellant. Further, the Exide Industries have received payments from the assessee only after adjusting the incentives and scrap values. Therefore, as the assessee did not account these incentives as his income, the same was calculated from the ledger account submitted by M/s Exide Industries and brought to tax. Therefore, in the absence of books of accounts, the AO did not fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the appellant has clearly failed to substantiate the outcome of scrap sales and as to the quantum of profit/loss. In the circumstances, the AO is permissible to make estimate profits as held in a catena of judicial decisions of course subject to a caveat that his estimate should be a reasonable one and should not be arbitrary. In this case, the AO has adopted the profit on studying business model that has not been elaborated or brought on record by the AO. The AO has adopted different profit ratio for three different AYs. The working has not been given. The rate adopted is high and is not reasonable. It is imperative to keep in view the business model of the appellant and that majority of its sale of old batteries [treated as scrap] is to M/s Exide. Yet, the profit element could not be brushed aside. After considering the totality of the facts and circumstances of the case, I am of the view that restriction of profit margin to the extent of 50% of the addition effected by the AO for the respective impugned years would meet the ends of justice. The appellant's ground is partly allowed. We noted that the Tribunal has estimated the profit rate for all the years at 10% in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumulative satisfaction of all three limbs has not established. Thus, the onus which lies on the appellant to prove the cash found deposited in the bank accounts was not discharged either before the A.O. or before the undersigned. The appellant has not demonstrated that the cash deposits have been included in the sale receipts by reconciling the entries in the bank account. The appellant has not brought any explanation with reference to the accounts which in any case he had not maintained completely except saying that he has included the cash deposits in his accounts. 12.4. In view of the failure on the part of the appellant and keeping in view the facts narrated above and hi absence of any supporting corroborative evidences, the A.O. was justified in making addition of peak cash credit of. Rs.7,34,400/-, Rs.3,73,800/-, Rs.10,00,000/- and Rs.39,43,450/- for AYs. 2010 to 2013-14. Accordingly, the order of the A.O. is confirmed on this ground. The appellant's ground is dismissed. 18.2 Even now before us, the assessee could not make any submission or could not produce any evidence to explain that these cash deposit in South Indian Bank during these 4 years is out of sale proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the outset, it is noticed that this issue also arose in the 7 appeals of Shri Shanthilal D Jain and the same was dealt by the Bench and the order of CIT(A) restricting the disallowance at 50% of the amount disallowed by AO. The AO made disallowance at 25% of expenditure in all the assessment years and the CIT(A) restricted further 50% of the amount disallowed by the AO by observing in para 10.4 as under:- 10.4 On appraisal of the facts of the case, materials on record and the basis of the observations made supra on the impugned addition, I am of the view that the restriction of disallowance to 50% of the amount disallowed by the AO for the respective AYs under consideration would meet the ends of justice. Thus, the AO is directed to restrict the disallowance accordingly. Therefore, the appellant gets partial relief and the appellant's grounds on this issue are partly allowed. We noted that we have already dealt with this issue in para 5.4 of this order and taking a consistent view, we confirm the order of CIT(A) restricting the disallowance to 50% of the amount disallowed by the AO in the respective assessment years. This issue of assessee's appeals in ITA Nos.429 to 434/Chn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash discount while purchasing the batteries from M/s Exide Industries. But these incentives were not accounted for in his books. Instead, M/s Exide Industries adjusted these incentives against the scrap sold by the appellant. Further, the Exide Industries have received payments from the assessee only after adjusting the incentives and scrap values. Therefore, as the assessee did not account these incentives as his income, the same was calculated from the ledger account submitted by M/s Exide Industries and brought to tax. Therefore, in the absence of books of accounts, the AO did not find any alternate except to add the incentives. The appellant could not demonstrate that he had offered the incentives correctly to tax by adducing evidence even before the undersigned. In view of the appellant's failure, I hold that the AO's action on this issue is in order. The appellant's ground is dismissed. Even now before us, the ld.counsel for the assessee has not made any argument or not produced any evidences for deletion of addition of incentives received by assessee. We noted that this very issue, we have adjudicated vide para 6.2 above and taking a consistent view, we dismiss this issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the onus would have been treated as discharged whereas in the present case the cumulative satisfaction of all three limbs has not established. Thus, the onus which lies on the appellant to prove the cash found deposited in the bank accounts was not discharged either before the A.O. or before the undersigned. The appellant has not demonstrated that the cash deposits have been included in the sale receipts by reconciling the entries in the bank account. The appellant has not brought any explanation with reference to the accounts which in any case she had not maintained completely except saying that he has included the cash deposits in her accounts. 12.4. In view of the foregoing discussions, the A.O. was justified in making addition of peak cash credit of. Rs.743,66,700/- for A.Y.2008-09, Rs.12,02,130 for A.Y. 2011-12 and Rs.54,86,640 for A.Y. 2013-14. Accordingly, the order of the A.O. is confirmed on this ground. The appellant's ground is dismissed. 22.2 Even now before us, the assessee could not make any submission or could not produce any evidence to explain that these cash deposit in South Indian Bank during these 4 years is out of sale proceeds of battery. The addition m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as adopted the profit by observing that the appellant had offered higher percentage of margin in respect of scrap sale for AY 2009-10 and 2010-11 and has chosen to adopt 30% margin. The AO, however, has not substantiated any material reasons for adopting this uniform rate of 30%. It is imperative to keep in view the business model of the appellant and that majority of its sale of old batteries [treated as scrap] is to M/s Exide. Yet, the profit element could not be brushed aside. After considering the totality of the facts and circumstances of the case, I am of the view that restriction of addition to 50% of the addition made by the AO towards profit from trading and scrap would meet the ends of justice. The appellant's ground is partly allowed. We noted that the Tribunal has estimated the profit rate for all the years at 10% in the case of Shri Shanthilal D Jain at para 10.1 & 10.2 supra, and hence taking a consistent view, we restrict the profit rate @ 10% and direct the AO accordingly. Hence, this common issue in these 4 appeals of assessee in ITA Nos.431 to 434/Chny/2020 is partly allowed as indicated above. 24. The next common issue in these two appeals of assessee in IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, the assessee has advanced to M/s. Shree Batteries. The assessee made this statement but could not produce any evidences that the amount received from Shri Dharmichand, individual amounting to Rs.10 lakhs is explained. As the assessee could not provide the details and even now on a special query, the assessee could not explain sources of this Rs.10 lakhs and even no evidences qua, was produced before us and no argument was made by ld.counsel for the assessee. Therefore, we have no alternative except to confirm the action of lower authorities. This issue of assessee's appeal in ITA No.429/Chny/2020 is dismissed. 24.3 As regard to the addition of transfer of Rs.54,02,472/- in assessment year 2009-10, the facts are identical as in assessment year 2008-09, the CIT(A) has already allowed this ground by observing in para 22.3 as under:- "22.3 The appellant has transferred Rs.54,02,472/- from her personal books to M/s. Shree, the appellant's proprietary concern. The appellant had credited Rs.12 lakhs and Rs.40 lakhs during F.Y. 2008-09 and Rs.8 lakhs during F.Y. 2009-10 in her personal books. In view of her failure to prove the credit, the sum of Rs.10 lakhs [represented by cash cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any detail. Accordingly the AO added the sum of Rs.45,52,182/- as unexplained cash credit u/s.68 of the Act. Aggrieved assessee preferred appeal before CIT(A). The CIT(A) noted that the assessee has not given any details and hence, he confirmed the action of AO by observing in para 20.3 as under:- "20.3 I have gone through the facts of the case and material available on record. The appellant did not produce any evidence relating to the identity, credit worthiness of the impugned loan creditor before the AO. It is relevant to mention that the appellant could not and did not produce any evidence on the subject matter even before the undersigned. In view of the appellant's failure, I am of the view that the addition representing the credit of Rs.40,00,000 and consequently, the disallowance of interest claimed on such bogus credit of Rs.5,52,182/- deserve to be upheld. The appellant's ground is dismissed." 25.2 Similarly in assessment year 2009-10, the assessee introduced a further sundry creditor loan of Rs.8 lakhs apart from earlier Rs.40 lakhs and also claimed consequential interest of Rs.1,40,850/-. The CIT(A) deleted the addition of Rs.40 lakhs already made in assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase value and hence, the assessee has made actual purchases as claimed. The AO in the absence of any detail, was not convinced and disallowed a sum of Rs.27,72,435/-as inflation of purchases. Aggrieved assessee preferred appeal before CIT(A). Before CIT(A), the assessee did not furnish any evidence and hence, he confirmed the action of AO by observing in para 23.3 as under:- "23.3 The appellant has not furnished any evidence in support of her claim during the course of appeal proceedings. Hence, I am of the view that there is no infirmity in the action of the AO. The appellant's ground is dismissed." Aggrieved now assessee is in appeal before the Tribunal. 26.2 We have heard rival contentions and gone through the facts and circumstances of the case. Even now before us despite a specific query to explain the inflation of purchases of Rs.27,72,435/- the assessee could not file any explanation or evidences. Even the ld.counsel for the assessee could not make any argument. Hence, we confirm the action of the CIT(A). This issue of assessee's appeal is dismissed. 27. Now, we will deal with the following 17 appeals:- S.NO ITA Nos. ASST YEAR NAME OF ASSESSEE 1. 2389/CH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in excess of threshold shall keep and maintain such books of account and other documents as may enable the AO to compute his total income in accordance with the provisions of this Act. It is hi undisputed fact that the appellant's turnover in the AYs under consideration is in excess of the prescribed threshold. It is not in dispute that search was conducted in the appellant's and during course of search proceedings it has been admitted by the appellant that he had not maintained regular books of account and he had maintained only purchase and sales ledgers. The AO has brought on record the averments made by the appellant to this effect. It is further pertinent to note that that the AO has stated that the appellant could not produce any accounts in support of various claims including that of indirect expenditure. It is further relevant to observe that the fact that the appellant was not maintaining the books of account and that statement was not denied and retracted. On perusal of records, it is clear that the AO could not fully deduce the true and correct income of the appellant except by resorting to disallowance on the basis of certain heuristics with reference to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O has initiated penalty proceedings for failure to maintain books of account of the appellant's business. Inadvertent mistake of the AO is a curable defect as the appellant very well knows that the turnover of his business is well above the threshold limit and is under clear obligation to maintain books of account. The appellant's hyper technical argument deserves to be rejected and hence the same is rejected. 7.4. It is settled position of law that the onus to prove that there is reasonable cause in terms of S273B of the Act is on the appellant. The appellant has failed to discharge his onus. As discussed above, there is default on the part of the appellant in complying with the provisions of Sec. 271A to be read in an integrated manner with Sec. 44 AA of the Act. 7.5 In view of the above remarks, I am of the opinion that the appellant has defaulted in terms of S271A of the Act and consequently no interference in the AO's action of levy of penalty of Rs 25000 u/s 271A of the Act for each of the AYs under consideration is called for. The view of the undersigned is fortified by the decision of the Hon'ble High Court of Jharkhand in the case of A One Batteries (P) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Before us, ld.counsel for the assessee made only one statement that the Hon'ble Allahabad High Court in the case of CIT vs. S.K. Gupta & Co., (2010) 322 ITR 86, Hon'ble Madhya Pradesh High Court in the case of Bharat Construction Co. vs. ITO, (1999) 153 CTR 414 and Hon'ble Gauhati High Court in the case of Surajmal Parsuram Todi vs. CIT, (1996) 222 ITR 691 has categorically held that once books of account are not maintained and consequently penalty u/s.271A of the Act is levied and confirmed, no penalty u/s.271B of the Act for failure to get the accounts audited u/s.44AB of the Act be levied. The Hon'ble Gauhati High Court in the case of Surajmal Parsuram Todi, supra, held as under:- We have gone through the provisions of ss. 44AA, 44AB, 271A and 271B of the Act. Maintenance of accounts is envisaged under s. 44AA and on failure to do so the assessee shall be guilty and liable to be penalised under s. 271A. Even after maintenance of books of account the obligation of the assessee does not come to an end. He is required to do something more, i.e., by getting the books of account audited by an accountant. But when a person commits an offence by not maintaining the books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Allowed 2400/CHNY/2019 2011-12 Allowed 2401/CHNY/2019 2012-13 Allowed 2402/CHNY/2019 2013-14 Allowed 2587/CHNY/2019 2010-11 Partly Allowed 2588/CHNY/2019 2011-12 Partly Allowed 2589/CHNY/2019 2012-13 Partly Allowed 2590/CHNY/2019 2013-14 Partly Allowed 2591/CHNY/2019 2010-11 Dismissed 2592/CHNY/2019 2011-12 Dismissed 2593/CHNY/2019 2012-13 Dismissed 2594/CHNY/2019 2013-14 Dismissed 2595/CHNY/2019 2010-11 Allowed 2596/CHNY/2019 2011-12 Allowed 2597/CHNY/2019 2012-13 Allowed 2598/CHNY/2019 2013-14 Allowed 429/CHNY/2020 2008-09 Dismissed 430/CHNY/2020 2009-10 Dismissed 431/CHNY/2020 2010-11 Partly Allowed 432/CHNY/2020 2011-12 Partly Allowed 433/CHNY/2020 2012-13 Partly Allowed 434/CHNY/2020 2013-14 Partly Allowed 435/CHNY/2020 2008-09 Dismissed 436/CHNY/2020 2009-10 Dismissed 437/CHNY/2020 2010-11 Dismissed 438/CHNY/2020 2011-12 Dismissed 439/CHNY/2020 2012-13 Dismissed 440/CHNY/2020 2013-14 Dismissed 441/CHNY/2020 2008-09 Allowed 442/CHNY/2020 2009-10 Allowed 443/CHNY/2020 2010-11 Allowed 444/CHNY/2020 2011-12 Allowed 445/CHNY ..... 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