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TMI Blog2025 (1) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... FIR and forensic audit further corroborate the assessee s claim that he had no control over the transactions and was merely a signatory under his employer s instructions. The arbitrary estimation of income by the lower authorities is set aside. Accordingly, the additions made to the assessee s income are deleted and in the result the appeal of the assessee is allowed. - Ms. Suchitra Kamble, Judicial Member And Shri Makarand V. Mahadeokar, Accountant Member For the Assessee : Shri Mehul Thakkar, AR For the Revenue : Shri Rignesh Das, Sr.DR ORDER PER MAKARAND V. MAHADEOKAR, AM: This appeal has been filed by the assessee challenging the order of the Commissioner of Income Tax (Appeals)-3, Ahmedabad [hereinafter referred to as CIT(A) ] dated 21.05.2018 for the Assessment Year (AY) 2013-14, wherein the CIT(A) partially upheld the addition made by the Assessing Officer [hereinafter referred to as AO ] under Section 144 r.w.s. 145(2) of the Income Tax Act, 1961 [hereinafter referred to as the Act ] by estimating the profit at 0.1% of the gross turnover after rejecting the books of accounts. Facts of the Case 2. The assessee is an individual carrying on a wholesale trading business of ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.1% overlooking the facts mentioned in the remand report of the A.O. wherein trading activities of the appellant was thoroughly verified during remand proceedings and therefore there is no scope of attracting provisions of section 145(2) of the I.T. Act, 1961. 3. The appellant craves leave to add, alter or delete any ground either before or in the course of hearing of the appeal. Condonation of Delay 4. It was observed that there is delay of 880 days in filing an appeal before us. The assessee has filed an application for condonation of delay, supported by an affidavit explaining the reasons for the delay. The primary reason cited for the delay is that the assessee, who has limited educational qualifications, relied entirely on the assurances of Shri Jayeshbhai Ganatra, his former employer, who had opened the proprietorship firm Prism Agri Tradelink in the name of the assessee without his involvement in the firm s operations. It has been submitted that all transactions of the firm were conducted by Shri Ganatra, and the assessee was merely a signatory to the documents under instructions. The affidavit further explains that the assessee was repeatedly assured by Shri Ganatra that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 880 days. Accordingly, the delay is condoned, and the appeal is admitted for adjudication on merits. On Merits 7. During the course of hearing before us the Authorised Representative (AR) of the assessee argued on the basis of key points relating to - Verification of Books of Accounts in the Remand Report by the AO. - Summons to Sundry Creditors/Debtors by the AO. - Contradiction in the CIT(A) s Findings. 7.1. The AR stated that the AO, after thorough verification during the remand proceedings, found the following records to be complete and accurate: Sales register and purchase register Original invoices and bills Bank statements Stock details and evidence of expenses 7.2. The AR further stated that four parties were summoned by the AO for verification of transactions, and all appeared before the AO with original photo ID and confirmations, proving the genuineness of the transactions. 7.3. The AR also argued that the CIT(A) acknowledged that the missing details had been provided during remand proceedings and verified by the AO but still upheld the rejection of the books without valid reasons. The CIT(A) s reliance on Bholanath Poly Fab Pvt. Ltd. (supra) was misplaced as no bogus t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Bank of Baroda alleges that Shri Jalaram Rice Industries Pvt. Ltd., through its directors, including Mr. Jayesh Tribhovandas Ganatra, submitted false/fictitious details of book debts and siphoned off loan proceeds. The forensic audit report accompanying the FIR supports these findings and indicates a pattern of fraudulent conduct by the employer. The assessee has consistently maintained that all transactions in the name of Prism Agri Tradelink were controlled by his employer and that he derived no personal benefit from them. This FIR substantiates the assessee s submission that he was merely a signatory on the instructions of his employer and was not involved in any fraudulent activity. It also lends credence to his claim that his financial records were unrelated to the employer's alleged fraud and were verified as genuine during the remand proceedings. 9.1. The Hon ble Supreme Court and various High Courts have consistently held that the rejection of books of accounts must be based on concrete findings and not mere conjecture or low profit ratios. In the present case, the AO s remand report verified all entries in the books of accounts, confirming their correctness. The CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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