SHRI HARI KRISHNA RATHI, Neemuch V. THE ITO, Neemuch

ITA 700/IND/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5744 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 13-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S MUNDRA; ARPIT MUNDRA CAS
• Keywords: Business income; Loose papers; Retraction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO.700/IND/2015 A.Y. : 2004-05 SHRI HARI KRISHNA RATHI, ITO PROP. RATHI BROTHERS, VS. NEEMUCH MANASA APPELLANT RESPONDENT PAN NO. ACZPR0147A A PPELLANT S BY : SHRI S.S.MUNDRA AND SHRI ARPIT MUNDRA, CAS RESPONDENT BY : SHRI R.A.VERMA, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), UJJAIN, DATED 03.08.2015 FOR THE ASSESSM ENT YEAR 2004-05. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - DATE OF HEARING : 23 .02. 20 16 DATE OF PRONOUNCEMENT : 26 .02.16 SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 2 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT AT ALL JUSTIFIED IN A) NOT PROPERLY CONSIDERING AND FOLLOWING THE FINDING, CONCLUSION OBSERVATIONS AND DIRECTIONS BY I.T.A.T., INDORE, AS CONTAINED IN ITS ORDER DATE D 27.10.2009 WHEREBY THE CASE WAS REMITTED TO THE FILE OF AO. B) SUSTAINING THE ADDITION OF RS. 9,18,800/- (MADE BY AO ON THE GROUND THAT THE ACT OF THE APPELLANT IN MAKING PURCHASES ON CREDIT AND MAKING PAYMENTS LATER ON IS NOTHING BUT AN AFTERTHOUGHT AND COOKED STORY) ON THE GROUND THAT RETRACTION OF SURRENDER BY THE APPELLANT IS UNTENABLE BEING AN AFTERTHOUGHT. C) SUSTAINING THE ADDITION OF RS. 4,69,357/- ON THE POINT OF STOCK DIFFERENCES. D) SUSTAINING ADDITION TO THE EXTENT OF RS. 65,335/- BY APPLYING GROSS PROFIT RATE OF 1.86% ON ESCAPED SALES INSTEAD OF APPLYING NET PROFIT RATE AS HELD B Y SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 3 3 M.P. HIGH COURT IN CASE OF BALCHAND AJIT KUMAR VS. CIT, REPORTED AT (2003) 263 ITR 610. E) SUSTAINING ADDITION OF RS. 1,11,865/- PERTAINING TO POST SURVEY PERIOD BY APPLYING GROSS PROFIT RATE OF 1.86% (EVEN THOUGH NO DISCREPANCY HAS BEEN NOTICED IN POST SURVEY PERIOD) WITHOUT PROPERLY CONSIDERING THE DIRECTIONS CONTAINED IN I.T.A.TS ORDER TO THE EFFECT TO CONSIDER THE JUDGMENT OF DELHI COURT IN CASE OF CIT VS. ANAND KUMAR DEEPAK KUMAR REPORTED AT 294 ITR 497. F) NOT ALLOWING CREDIT BY TELESCOPING AGAINST INCOME OF RS. 1,15,643/- OFFERED BY THE APPELLANT IN THE FORM OF EXCESS CASH FOUND AT THE TIME OF SURVEY. G) NOT PROPERLY CONSIDERING THE MATERIAL AVAILABLE ON RECORD, WHICH ARE RELEVANT PERTAINING TO ISSUES ON WHICH ADDITIONS AS ABOVE HAVE BEEN SUSTAINED. 3. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DEALER IN PURCHASE AND SALE OF AGRICULTU RAL PRODUCE I.E. GRAINS, DALHAN, OIL SEEDS ETC. THE ASSESSEE HA S FILED THE APPEAL. ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3 ) SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 4 4 DETERMINING THE TOTAL INCOME AT RS. 23,11,076/-. TH E ASSESSEE HAS FILED THE APPEAL TO THE CIT(A) AND, THEREAFTER, ASSESSEE HAS FILED THE APPEAL TO I.T.A.T. INDORE BENCH. THE IND ORE BENCH I.T.A.T. HAS RESTORED THIS MATTER TO FRAME THE ASSE SSMENT AFRESH. THEREFORE, THE ASSESSMENT WAS MADE AFRESH. 4. THE FIRST GROUND OF APPEAL RELATES TO MAKING THE ADDITION OF RS. 9,18,800/- AS UNRECORDED PAYMENT TO AGRICULTURISTS. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CONTENDED THAT HE HAS MADE PAYMENT TO AGRI CULTURIST AFTER 2-3 MONTHS AND THE ASSESSEE WHILE SURVEY WAS CARRIED OUT AT HIS PLACE AND DURING THE COURSE OF SURVEY, O NE LOOSE PAPER WAS FOUND CONTAINING DETAILS OF TRANSACTIONS OF RS. 9,18,800/-, WHICH WAS PAID TO THE VARIOUS AGRICULTU RISTS. THE STATEMENT WAS GIVEN BY THE ASSESSEE AND THE ASSESSE E HAS ACCEPTED THAT ASSESSEE HAS MADE THE PAYMENT FROM UNDISCLOSED SOURCES. WHILE FRAMING THE ASSESSMENT O RDER, THE ASSESSEE HAS RETRACTED THE STATEMENT AND AFTER RETR ACTION, THE ASSESSEE HAS TAKEN THE CONTENTION BEFORE THE AO & L D. CIT(A) THAT THIS AMOUNT WAS ALREADY PAID TO AGRICULTURISTS BY THE SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 5 5 ASSESSEE PRIOR TO SURVEY. THE ASSESSEE WAS NOT ABLE TO EXPLAIN THIS PAYMENT DURING THE COURSE OF SURVEY. THEREFORE , NOW THE ASSESSEE IS WILLING TO GIVE EVIDENCE THAT THE ASSES SEE HAS MADE PAYMENT WHICH REFLECTED IN THE REGULAR BOOKS OF ACC OUNT. THEREFORE, THE AMOUNT SHOULD NOT BE ADDED TO THE TO TAL INCOME OF THE ASSESSEE. THE AO DURING THE COURSE OF ASSESS MENT PROCEEDINGS, ASKED THE ASSESSEE TO PRODUCE THE AGRI CULTURISTS ON 21.1.2010 AND ON THE APPOINTED DATE, NO ONE ATTE NDED. AGAIN THE NOTICE ON 24.5.2010 WAS FIXED FOR HEARING . NOBODY ATTENDED. THEREFORE, THE AO HAS MADE THE ADDITION. 6. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS DISMISSED THE GROUND AND CONFIRMED THE ADDITION . 7. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED AS UNDER :- THE LD. CIT(A) SUSTAINED THE ADDITION OF RS. 9,18,800/- ON THE FOLLOWING GROUND IN VIEW OF THE ABOVE POSITION, THE ASSESSEES UNSUCCESSFUL ATTEMPT TO RETRACT FROM THE DISCLOSURE IS UNTENABLE BEING AN AFTERTHOUGHT AND IS REJECTED. SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 6 6 THEREFORE, THE AO IS JUSTIFIED IN DERIVING THE CONCLUSION THAT THE CONTENTION OF THE APPELLANT IS UNBELIEVABLE THAT HE HAS MADE THE PAYMENT TO 29 PARTIES ON 12/08/2003 I.E. IMMEDIATELY BEFORE THE DAY OF SURVEY AND NOT REMEMBERING ON THE DATE OF THE SURVEY THEREBY SURRENDERING THESE PAYMENTS AS UNDISCLOSED INCOME. THEREFORE, THE ADDITION MADE BY THE A 0 AMOUNTING TO RS. 9,18,800/- IS CONFIRMED. ' ADDITION OF RS. 9,18,800/- SOLELY ON THE BASIS OF SURRENDER MADE AT THE TIME OF THE SURVEY WHICH WAS DULY CONFIRMED BY THE CIT-A UJJAIN HOLDING THAT 'IN VIEW OF THE ABOVE POSITION, THE ASSESSEE'S UNSUCCESSFUL ATTEMPT TO RETRACT FROM THE DISCLOSURE IS UNTENABLE BEING AN AFTERTHOUGHT AND IS REJECTED IS WITHOUT ANY MATERIAL TO SUPPORT. HON'BLE ITAT IN PA RA 04 OF ITS ORDER DATED 29.10.2009 HAS SPECIFICALLY HELD - SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 7 7 ''LF ANALYSED, SOME CLEAR (ACTS OOZING OUT ARE THAT FIRSTLY, AS CLAIMED BY THE ASSESSEE, THE SURRENDER WAS NOT VOLUNTARY. ' PERUSAL OF THE CONTENT OF PARA 02 OF PAGE 08 OF THE ASSESSMENT ORDER DATED 31/05/2010 WILL REVEAL THAT THE AO HAS ALSO MIS-CONVINCED THE ORDER OF THE ITAT DATED 20.10.2009 AND OBSERVED THAT ITAT INDORE HAS CONFIRMED THIS AMOUNT OF ADDITION VIDE PAGE NO. 06 OF 07 OF ORDER NO. I.T.A.NO. 97/IND/2008 DATED 20/10/2009. IN FACT THESE ARE ABSTRACT FROM THE ORDER DATED 20112/2007 PASSED BY THE CIT-A (UJJAIN) IN THE ORIGINAL PROCEEDINGS. THE PAYMENTS WORTH OF RS.9, 18,800/- TO THE AGRICULTURIST FOR THE SOYABEAN PURCHASE ALREADY STANDS RECORDED IN CASH BOOK OF THE ASSESSEE FOUND AT THE TIME OF THE SURVEY. AFFIDAVITS OF AGRICULTURIST ALONG WITH THE RECORD O F SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 8 8 THEIR LAND HOLDING OBTAINED AND SUBMITTED BEFORE TH E LD. AO IN ORIGINAL ASSESSMENT PROCEEDINGS CONFIRMING THE FACT THAT PAYMENTS WORTH OF RS. 9,18,800/- MADE TO THEM PRIOR TO THE DATE OF THE SURVEY. THIS VITAL EVIDENCE HAS BEEN BRUSHED ASIDE BY HOLDING THAT AFFIDAVITS FILED BY THE ASSESSEE, F ROM THE SELLERS OF THE SOYABEAN, FOR RECEIVING PAYMENTS OF RS. 9,18,8001- ARE NOT RELIABLE AND ASSESSEE FAILED TO PRODUCE THE AGRICULTURIST. THE OBSERVATIONS OF THE HON'BLE I.T.A.T. ON THIS ISSUE IS AS UNDER :- 'THE AMOUNT OF RS. 9,18,800/- PAYMENTS FROM AGRICULTURIST (LIST OF UGRANI) THOUGH NOT CREDITED IN BOOKS OF ACCOUNTS, AS CLAIMED BY THE ASSESSEE, IT WAS A SOYABEAN PURCHASES FROM VARIOUS AGRICULTURIST AND THE AMOUNT WAS PART PAYMENT WHICH WAS OUTSTANDING AND PAID BEFORE THE SURVEY'. THIS ABOVE MENTIONED OBSERVATION IS VERY CLEAR ON THIS ISSUE. SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 9 9 CASH OF RS. 1,15,6431- GOT SURRENDERED AFTER CONSIDERING THE PAYMENTS OF RS. 9,18,800/- ALREADY ACCOUNTED FOR AS ON THE DATE OF THE SURVEY ITSELF. ASSESSING OFFICER WAS ALSO REQUESTED TO GIVE A CERTIFIED COPY OF ACCOUNTS BOOK FOUND AT THE TIME O F THE SURVEY AND CASH BOOK ENTRIES TO SUPPORT THE ALLEGATION MADE BY THE DEPARTMENT THAT UNRECORDED PAYMENTS WORTH OF RS. 9,18,800/- HAVE BEEN MADE BY THE ASSESSEE. THE LD. AO- NEEMUCH FIXED THE HEARING ON 14/05/2010 BY ISSUE OF NOTICE DATED 04/05/2010 . THE APPELLANT HIMSELF ALONG WITH THE AGRICULTURIST APPEARED IN INCOME TAX OFFICE, NEEMUCH ON 14/05/2010 BUT THE LD. AO WAS NOT AVAILABLE IN THE OFFICE. AGAIN BY NOTICE DATED 24/05/2010, THE LD. AO FIXED THE HEARING ON 31/05/2010 BUT THIS NOTICE WAS RECEIVED ON 01/06/2010 (AFTER THE EXPIRY OF THE DATE FIXED FOR HEARING) AS SUCH NO COMPLIANCE THEREOF COULD HAVE BEEN MADE. IGNORING THIS FACT NOTICE WAS SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 10 10 SERVED ON 01/06/2010, THE LD. AO PASSED THE ASSESSMENT ORDER BY HOLDING THAT THE ASSESSEE FAILE D TO PRODUCE THE AGRICULTURIST. THIS FACT WAS ALSO BROUGHT TO THE NOTICE OF CIT- A (UJJAIN) ,BUT HE HA S ALSO NOT CONSIDERED AND APPRECIATED THE CONTENTION OF THE APPELLANT. TO SUPPORT THE CLAIM AFFIDAVIT FILED BY THE ASSESSEE BEFORE THE BENCH IS ENCLOSED HEREWITH. THE ITAT HAS ALSO OBSERVED 'IT WAS ALSO PLEADED THAT WHEN THE ASSESSEE PROVED THE PAYMENT OF RS. 9,18,800/- BY PRODUCING CASH BOOK ON THE DATE OF TH E SURVEY AS WELL AS THE AFFIDAVITS OF THE AGRICULTURI ST (DURING THE ASSESSMENT PROCEEDINGS), THE ONUS WAS NOT DISCHARGED BY THE REVENUE IN THE LIGHTS OF THES E FACTS AND THE DECISION FROM THE HON'BLE DELHI HIGH COURT IN CIT VS. ANAND KR. DEEPAK KUMAR (294 ITR 497), THE DEPARTMENT IS SUPPOSED TO CONSIDER THE AFORESAID FACTS'. IN VIEW OF THE ABOVE SUBMISSION, THE ADDITION OF RS . 9,18,800/- MADE BY THE LD. AO AND SUSTAINED BY THE SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 11 11 CIT-A (UJJAIN) MAY KINDLY BE DELETED. 8. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 9. HAVING HEARD BOTH THE PARTIES AND LOOKING TO THE FA CTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE DURI NG THE COURSE OF HEARING THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED BEFORE ME THAT HE WAS READY TO PRODUCE AGRICULTURIS TS BEFORE THE A.O. ON THE APPOINTED DATE. THE ASSESSEE HAS AL READY PRODUCED ALL AGRICULTURISTS BEFORE THE ITO, BUT NOB ODY WAS THERE. THEREFORE, THE ASSESSEE FAILED TO PRODUCE AG RICULTURISTS. NOW, HE IS READY TO PRODUCE THE AGRICULTURISTS. THE REFORE, THE MATTER MAY BE RESTORED TO THE AO. I AM IN AGREEMENT WITH THE SUBMISSION OF THE ASSESSEE AND IN THE INTEREST OF J USTICE AND FAIR PROFIT AND LOSS ACCOUNT, I RESTORE THIS MATTER BACK TO THE FILE OF AO. THE ASSESSEE IS DIRECTED TO REMAIN PRES ENT BEFORE THE AO AND HE MUST FILE THE APPLICATION BEFORE THE AO THAT HE IS READY AND WILLING TO PRODUCE THE AGRICULTURISTS ON THE DATE APPOINTED BY THE ASSESSING OFFICER. THE AO IS DIREC TED TO VERIFY THE GENUINENESS OF THE PAYMENT AND WHETHER THIS PAY MENT SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 12 12 WAS REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS OR N OT AND DECIDE THE MATTER AFRESH. 10. AS A RESULT, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. NEXT GROUND RELATES TO THE ADDITION OF RS. 4,69,357 /- ON THE BASIS OF SURRENDER MADE AT THE TIME OF SURVE Y. 12. DURING THE COURSE OF SURVEY PROCEEDINGS, THE AO AND SURVEY PARTY HAS TAKEN THE STOCK AT WORTH RS. 3,75, 000/-, BUT NO SUCH DETAIL WAS AVAILABLE WITH THE ASSESSEE TILL DATE. THE ASSESSEES CONTENTION THAT THE STOCK WAS AS PER THE BOOKS OF ACCOUNTS AND NO ADDITION REQUIRES TO BE CALLED FOR. THE AO DID NOT AGREE WITH THE SUBMISSION OF THE ASSESSEE AND M ADE THE ADDITION. 13. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS CONFIRMED THE ADDITION. 14. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED BEFORE ME THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE HAS SPECIFICALLY REQUESTED THE AO FOR SUPP LYING THE COPY OF STATEMENT WHEREBY STOCK AS PER THE ACCOUNT BOOKS AS ON THE DATE OF SURVEY HAS BEEN COMPUTED AT RS. 3,75 ,000/-. SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 13 13 THE ASSESSEE WAS NOT GIVEN THE COPY OF THE INFORMAT ION AND THE STATEMENT. THEREFORE, THE ADDITION DOES NOT CAL L FOR. 15. ON THE OTHER HAND THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 16. HAVING HEARD BOTH THE PARTIES AND LOOKING TO THE FA CTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE ASSE SSMENT ORDER WAS PASSED ON 29.12.2006. AS PER THE ASSESSME NT ORDER, I HAVE GONE THROUGH THE REQUEST LETTER OF THE ASSES SEE WHICH IS DATED 20.12.2006 AND 26.12.2006, WHEREIN THE ASSESS EE HAS REQUESTED THE AO TO GIVE THE COPY OF THE STOCK COMP UTED BY THE ASSESSING OFFICER. I FIND FROM THE ASSESSMENT O RDER THAT NO COPY OF THE STATEMENT WAS GIVEN TO THE ASSESSEE. TH E ASSESSEE WAS NOT GIVEN ANY DOCUMENT. THEREFORE, IN THE INTER EST OF JUSTICE AND FAIR PLAY, I RESTORE THIS ISSUE BACK TO THE FILE OF AO AND THE AO IS DIRECTED TO GIVE THE COPY OF THE STAT EMENT TO THE ASSESSEE, WHEREBY THE STOCK AS PER THE ACCOUNT BOOK S AS ON THE DATE OF SURVEY HAS BEEN COMPUTED AT RS. 3,75,00 0/-, AS REQUIRED BY THE ASSESSEE IN HIS LETTER, WHICH IS ON PAPER BOOK PAGE NO. 17 PARAGRAPH 3 AND DECIDE THE MATTER AFR ESH. SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 14 14 17. GROUND NO. 3 RELATES TO THE ADDITION OF GROSS PROFI T AT RS. 65,335/-. 18. ON SCRUTINY OF THE ACCOUNT, THE AO HAS VERIFIED THE TRADING ACCOUNT BEFORE SURVEY AND AFTER SURVEY AND POSITION WAS SUMMARIZED AS UNDER :- OP.STOCK PURCHASE DIRECT EXP. G.P. SALES CLO.ST OCK BEFORE SURVEY RS.61,2801 RS. 28149019 RS. 812043 RS.905217 RS. 29453552 RS. 1025528 AFTER SURVEY RS. 1025528 RS. 6700354 RS. 441552 RS.(-)497736 RS. 7669698 00 19. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY OB SERVING AS UNDER :- 4.5 THROUGH THIS GROUND THE APPELLANT HAS CHALLENGE D THE ADDITION OF RS. 74,400/- ON ACCOUNT OF GROSS PROFIT . THE APPELLANT CONTENDED THAT NET PROFIT SHOULD BE ADOPT ED INSTEAD OF GROSS PROFIT RATE. IT IS TO BE MENTIONED HERE THAT THE APPELLANT HAS ALREADY DEBITED THE EXPENSES IN P ROFIT AND LOSS ACCOUNT WITH ALL EXPENSES. THE DEPARTMENT HAS CARRIED OUT SURVEY OPERATION AT THE BUSINESS PREMIS ES OF THE APPELLANT AND GATHERED ALL THE DOCUMENTS. FROM THE SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 15 15 NOTINGS RECORDED IN THE LOOSE PAPERS THE TURNOVER O F THE APPELLANT COMES AT RS. 35,12,618/-. THE AO ESTIMATE D THE SALES OF THE APPELLANT AT RS. 40,00,000/- WHICH IS WITHOUT ANY BASIS. IT WILL BE APPROPRIATE TO RESTRICT THE S ALES TURNOVER AT RS. 35,12,618/-. THE GROSS PROFIT RATE @ 1.86% SHOULD BE APPLIED TO THE UNDISCLOSED SALES OF RS. 35,12,618/-. THEREFORE, THE ADDITION TO THE EXTENT OF RS. 65,335/- IS CONFIRMED. THE APPELLANT WILL GET THE R ELIEF OF RS. 9,065/-. THEREFORE, THIS GROUND OF APPEAL IS PA RTLY ALLOWED. 20. HAVING HEARD BOTH THE PARTIES AND LOOKING TO THE FA CTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE ASSE SSEE HAS DEBITED EXPENSES IN PROFIT AND LOSS ACCOUNT WITH AL L HIS EXPENSES. THE DEPARTMENT HAS CARRIED OUT THE SURVEY OPERATION AND ALL THE DOCUMENTS WERE GATHERED FROM THE NOTING. THE TURNOVER OF THE ASSESSEE WAS RS. 35,12, 618/-. THE LD. CIT(A) HAS RESTRICTED THE SALES OF CIT(A) AT RS . 35,12,618/- AND APPLIED GROSS PROFIT @ 1.86% TO THE UNDISCLOSE D SALES. THEREFORE, MY INTERFERENCE IS NOT REQUIRED. THE ASS ESSEE HAS SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 16 16 ALSO CHALLENGED THE GROSS PROFIT @ 1.86%. SINCE THE AO HAS APPLIED THE GROSS PROFIT AT 1.86% AS IT WAS SHOWN B Y THE ASSESSEE IN HIS BOOKS OF ACCOUNT AND THE GROSS PROF IT SHOWN IS REASONABLE. THEREFORE, I DO NOT INTERFERE WITH THE ORDER OF CIT(A). THEREFORE, THIS GROUND IS DISMISSED. 21. NEXT GROUND RELATES TO SUSTAINING THE ADDITION OF R S. 1,11,865/- PERTAINING TO POST SURVEY PERIOD BY APPL YING GROSS PROFIT RATE OF 1.86%. 22. THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 1,11,865/- ON ACCOUNT OF GROSS PROFIT. THE AO HAS T AKEN THE TOTAL SALES OF RS. 3,71,23,250/- FOR THE ENTIRE YEA R AND APPLIED THE GROSS PROFIT RATE OF 1.86 % AS CONTENDED BY THE ASSESSEE. SINCE THE GROSS PROFIT RATE @ 1.86% HAS BEEN ADOPTE D. THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED BY THE LD. CIT(A). 23. HAVING HEARD BOTH THE PARTIES, SINCE THE AO HAS TA KEN THE TOTAL SALES OF RS. 3,71,23,250/- FOR THE ENTIRE YEAR AND APPLIED THE GROSS PROFIT RATE OF 1.86 % AS CONTENDE D BY THE ASSESSEE. THEREFORE, I DO NOT INTERFERE WITH THE OR DER OF CIT(A). THEREFORE, THIS GROUND OF APPEAL IS DISMISSED. SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 17 17 24. LAST GROUND RELATES TO NOT ALLOWING CREDIT BY TELESCOPING AGAINST INCOME OF RS. 1,15,643/- OFFERE D BY THE ASSESSEE IN THE FORM OF EXCESS CASH FOUND AT THE TI ME OF SURVEY. 25. THE ASSESSEE DID NOT RECORD THIS CASH IN BOOKS OF ACCOUNT AND ASSESSEE HIMSELF HAS DISCLOSED THIS AS ADDITIONAL INCOME. THE ASSESSEE HAS CLAIMED THAT THE ASSESSEE MUST BE GIVEN TELESCOPING BENEFIT. 26. HAVING HEARD BOTH THE PARTIES, I AM OF THE VIEW THA T THE ASSESSEE HAS NOT SHOWN ANY DOCUMENTARY EVIDENCE BEFORE ME TO SHOW THAT THE ASSESSEE HAD SURRENDERED THIS I NCOME SUBJECT TO TELESCOPING BENEFIT. THEREFORE, I DISMIS S THE APPEAL ON THIS GROUND. 27. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. SHRI HARIKRISHNA RATHI, MANASA VS. ITO, NEEMUCH I.T.A.NO. 700/IND/2015 A.Y. 2004-05 18 18 THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 26 TH FEBRUARY, 2016, SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 26 TH FEBRUARY, 2016. CPU* 2325