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TMI Blog2023 (9) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... and made the addition as extra profit being 1% of the cash sales without rejecting the books of accounts of the Assessee. The pre condition for estimating business income where the assessee maintaining books of account is that, the books of the Assessee should be found to be unreliable or otherwise not realistic and not capable of demonstrating the income of the Assessee. Applying the ratio laid down in the case of Salochana Bhatia [ 2011 (5) TMI 838 - PUNJAB AND HARYANA HIGH COURT] and also Sanjay Aggarwal [ 2021 (9) TMI 1515 - ITAT RAIPUR] we are of the opinion that the addition made by the A.O. without rejecting the books of accounts of the Assessee is erroneous. Accordingly, we allow the Grounds of appeal of the Assessee. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of Rs. 4,90,000/- as extra profit for 1% of the cash sales. Further submitted that the A.O. did not find any discrepancy in the books of account of the Assessee also not doubted the sales and no information from the parties are called for by the A.O., to verify the genuineness of the sales though the address of the parties were duly provided to the A.O. Therefore, submitted that the addition made by the A.O. which was sustained by the CIT(A) deserves to be deleted. 5. Per contra, the Ld. Departmental Representative submitted that, when the assessee was asked to file confirmation of the parties from whom the cash payment had been received against the sales, the assessee filed only a computer generated print-outs which neither bore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... realized; and h. Copy of the VAT returns. The Ld. A.O. on the basis the sales made in cash, made addition of 1% of total cash sale on the on the reasoning that the gross profit ratio of the Assessee was 24.54%, however, the net profit ratio was merely 2.01% and therefore, the Assessee had under invoiced its cash sales, accordingly, added 1% of the Assessee s total cash sales realization to its income as extra profit. 7. It is observed that the Assessing Officer added 1% of the Assessee s total cash sale realization to its income as extra profit without any basis and arrived at the said figure by ignoring the confirmations of the parties from whom the cash sales were realized and the documents brought on record by the Assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons the correctness and bonafide of the book results declared. The AO is stoically silent on any kind of deficiency in books or excessive claim of any expenses etc. which could substantiate his action. It is incumbent upon the AO to record the inconsistency or incorrectness in the books which prevents the AO to ascertain true income chargeable to tax. The AO has neither rejected the books nor a single voucher was alleged to be unverifiable. In identically placed fact situation, the Hon ble Calcutta High Court in M/s. Swadeshi Commercial Co. Ltd. vs. CIT ITA No. 219 of 2001 judgment dated 18th December, 2008 concluded that in the absence of rejection of books, the estimation of profit is arbitrary, unreasonable and perverse. In CIT vs. Anil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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