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TMI Blog2022 (11) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... e Benches have held that without rejecting the purchases, the sundry creditor cannot be treated as the income of the assessee besides holding that the application of Section 68 to make addition in respect of current purchases is wholly arbitrary and against the law. Moreover the G.P. addition has already been made.In view of these facts and circumstances and detailed finding given by the Ld. CIT(A) and the ratio laid down in the various decisions as discussed hereinabove ,we are inclined to uphold the order of Ld. CIT(A). Consequently ground no. 1 raised by the revenue is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ained unexplained due to non-production of books of accounts. 5. In the appellate proceedings, the Ld. CIT(A) partly allowed the appeal of the assessee in respect of Rs. 1,49,30,067/- by reducing the contra entries to the extent of Rs. 1,20,49,544/- in the bank accounts and remaining of Rs. 28,80,523/- was explained from the debtors and loans repayments. The ld CIT(A) accepted Rs. 6,50,000/- on account of repayment from Mamta Mohta advanced in the earlier years and remaining of Rs. 22,30,523/- was treated as undisclosed sales. The Ld. CIT(A) confirmed the addition to the extent of Rs. 13,38,314/- by applying @ 60% of Rs. 22,30,523/- on account of understated sales by allowing 40% towards expenses. The Ld. CIT(A) while partly allowing the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as such. As regards the income embedded in the aforesaid .understated sale derived at Rs.22,30,523/- the A/R's plea is that there are expenses from the bank accounts and the whole sum of sale cannot be treated as income. The corresponding purchase or expenses, according to the A/R, has to be factored in whilecomputing the income to be added to the return of income. Since expenses or purchases are not very clear to me, I confirm the addition made on this account up to 60% of Rs.22,30,523/- being Rs. 13,38,314/-." 6. After hearing the rival submission and perusing the material on record, we find that the assessment was framed u/s 144 meaning thereby the assessee has not furnished the books of account and other documentary evidences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Mamta Mohta and in no way constitute the additional evidence and thus there was no violation of Rule 46A as the assessee has furnished these details after the Ld. CIT(A) called for the same from the assessee. Accordingly, ground no. 2 of the revenue's appeal is dismissed. The ground no. 3 raised by the revenue is against the allowing of 40% of the understated sales as expenses is also devoid of any merit as we observe from the order of the coordinate bench in her own case for AY 2013-14 in ITA No. 1163/Kol/2019 for AY 2013-14 wherein the Ld. CIT(A) has estimated the profit on sales as 1.50%. Accordingly we do not find any merit in the issue raised in ground no. 3 and hence the same is dismissed. 7. Issue raised in ground no. 4 is again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent payable against amounts claimed to be purchases. So at the best they represent expenses claimed in the profit & loss account In terms of mercantile system but pending for payment as on the year end. The correct approach would to test the genuineness of the underlying purchases or expenditures. The A.O is not correct to apply section 68 to make the addition Once the stock and sale are accounted in view of the audited accounts, the purchases should not be disturbed without specific finding against the genuineness. 12.3. Assessment u/s.144 gives no licence to make wild and high pitched assessment. In any case, assessment can be based on materials and has to be reasonable, even In cases of best judgement assessment. This addition is ill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mann.com 187 (Patna-Trib) and Allied Infra Suppliers, Ganjam vs. DCIT in ITA NO. 481/CTK/2017 dated 16.11.2018. In both the above decisions, the Co-ordinate Benches have held that the provisions of Section 68 are to be applied to the case of cash credit and not to the sundry creditors arising out of purchases as claimed by the assessee. The Ld. Counsel for the assessee also cited before us the decision of Hon'ble Delhi High Court in the case of CIT vs. Ritu Anurag Aggarwal reported in [2010] 2 taxmann.com 134 (Del) to buttress his arguments on the issue that where sales are treated as genuine the corresponding purchases cannot held to be bogus. The case of the assessee is squarely covered by the various other decisions of the Co-ordinate Be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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