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TMI Blog2025 (3) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... ere appears no justification of disallowing the expenses incurred on capital goods. There are two other groupings i.e. "Creditors for goods" and "creditors for expenses". Since the A.O. himself has satisfied with the details furnished during the remand report proceedings to which the appellant also agreed by offering some additional comments through rejoinder to remand report No.3, been left with no alternative but to agree with the A.O. Therefore, the total addition made by the A.O. by invoking the provisions of section 68 of the Act is deleted.
Addition on account of estimated net profit u/s. 145A - HELD THAT:- AO without rejecting the books of accounts estimated the GP, whereas the GP rate declared by the assessee shows increase by 0.2% for the present year under consideration. Therefore CIT(A) deleted the addition which does not require any interference. X X X X Extracts X X X X X X X X Extracts X X X X ..... s leave to add, alter and/or to amend all or any the ground before the final hearing of the appeal. 5. Heard rival submissions at length and perused the materials placed on record including the Paper Book filed by the assessee. Let us deal with each ground wise the issue before us. 6. Ground No.1 raised by the Revenue is admission of Additional evidences which is contravention of Rule 46A of the Rules. It is undisputed fact that the assessee responded to the notices by filing reply dated 29-10-2018 and 04-12-2018. Whereas the final show cause notice dated 11-12-2018 to comply the response before 14- 12-2018 was received by the assessee only on 19-12-2018. In the meanwhile, the Assessing Officer passed the assessment order dated 17-12-2018 stating that the assessee failed to comply the final SCN. However during the appellate proceedings, the assessee filed the details by way of additional documents, which were entertained by the Ld. CIT(A) by calling for Remand Report from the Assessing Officer dated 05-04-2019, 13-09-2019 and 29-08-2020 and by observing as follows: "10. Thus, sub-rule (4) of rule 46A of the rules permits the Appellate Commissioner to direct production of any do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indhi Community which deals in fruit business on large scale in the city of Ahmedabad. 3. The appellant has disclosed the turnover of Rs. 14,80,95,304/- during the year under consideration as against the turnover of Rs. 14,69,65,102/-, Thus, there is voluminous turnover in this fruit business. 4. The appellant had taken the loans on need basis and also repaid the same within reasonable time when the funds were available for such repayment. 5. All the transactions are through banking channels and most of the loans have been taken from the relatives of merchants dealing in the fruit business. 6. There has been no instance noticed on verification of the details so furnished that the appellant attempted to introduce his own unaccounted money by depositing the huge amount of cash in the bank accounts of lenders and then received the cheques for such unsecured loans. 7. In many cases, I have also noticed that there were repayment of loans from one concern (M/s. D. J. Fruits) and the same amounts have been transferred to another concern i.e. Hotel German Palace. 8. I have also noticed that the hotel business was commenced only in the year under consideration and total receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, copies of income-tax returns, bank statements/passbooks, etc. so as to arrive at the correct and logical finding on each of the unsecured loans. Conclusion:- Considering the detailed submissions of the appellant, remand reports and all the rejoinders to the remand reports, the addition of Rs. 5,78,03,566/- made by invoking the provisions of section 68 of the Act is hereby deleted. The ground No.2 is, thus, succeeds. 7.1. Similarly in the case of unsecured loans availed by D.J. Foods, Ld. CIT(A) deleted the addition after verification of the lenders, creditworthiness and genuineness of the transaction by observing as follows: "... 10.2 In view of the above findings given in respect of all the unsecured loans appearing in the balance-sheet of M/s. D.J Fruits, a prop, Concern of the appellant have been examined in depth individually in the light of all the relevant details furnished by the A.O. through three remand reports, rejoinders filed by the appellant and various documentary evidences supporting the identity of the lenders, genuineness of the transactions and in most of the cases, the creditworthiness of the lenders. In all the cases of lenders, it has been held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so agreed by offering some additional comments through rejoinder to remand report No.3, I have been left with no alternative but to agree with the A.O.. Therefore, the total addition of Rs. 47,02,918/- made by the A.O. by invoking the provisions of section 68 of the Act is deleted. Thus, the Ground No.4 succeeds." 9.1. The Ld. D.R. appearing for the Revenue could not contravent the factual findings arrived by Ld. CIT(A) except raising grounds of appeal and without any material on record. Hence the same is devoid of merit and Ground No. 4 is liable to be dismissed. 10. Ground No.5 raised by the Revenue is deletion of addition of Rs. 8,25,834/- on account of estimated net profit u/s. 145A of the Act. The Ld. CIT(A) held as follows: "15.3. The appellant had disclosed the net profit of Rs. 95,40,837/- on the total turnover of Rs. 1,03,66,071/- for the asst Year under consideration. The gross profit has been worked out to 6.44% which was 6.15% in the immediately preceding asst. Year, wherein the total turnover of Rs 14,69,05,103/- and the gross profit of Rs. 90,48,747/- was declared. Thus, the G.P. rate showed increase by 0.20% for the asstt. Year under consideration. Further, as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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