MR. PRAMOD KUMAR KHANDELWAL,AGRA vs. DY.C.I.T.-1, AGRA

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER

I.T.A Nos. 200 & 201/Agra/2016 (ASSESSMENT YEARs-2011-12& 2010-11)

Mr. Pramod Kumar Khandelwal, Vs.. DCIT-1, Prop. M/s Mahalaxmi Industries Agra. (Electricals), 27/3, Pt. Moti Lal Nehru Road, Agra. PAN:ACXPK7647Q (Assessee) (Revenue)

Assessee by Shri P. K. Sahegal, AR. Revenue by Smt. Sita Srivastava, Sr. DR.

Date of Hearing 24.03.2021 Date of Pronouncement 12.04.2021

ORDER Per, Dr. M.L. Meena, A.M.: Both the captioned appeals have been filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-1, Agra [(in short ‘the ld. CIT(A)], dated 30.03.2016 and 17.03.2016 for A.Ys. 2010-11 and 2011-12 respectively.

I.T.A Nos. 200 /Agra/2016 1. That the book results declared being properly supported by audited books of "accounts and other records maintained by the

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assessee and further these are progressive and quite comparable with the preceding years and even with others, thus, the same should have been accepted by the learned CIT(A)-I, Agra. 2. a) That the various expenses debited to the trading and profit and loss accounts have been incurred wholly and exclusively for the purposes of the business and looking at their nature, turnover, legitimate needs of business, business expediency and past established history with regard thereto, these should have been allowed as business expenditure. b) That the purchases of material are properly supported and verifiable with reference to the bills/invoices in case of registered dealers/suppliers and vouchers in case of non registered dealers/suppliers and further these vis-a-vis volume of the job/work done, were quite comparable thus, these should have been accepted. 3. a) That the learned CIT(A)-I, Agra has erred both in law and on facts in upholding the rejection of the books of accounts by invoking the provisions laid down under section 145 (3) of the Act and estimation of net profit @ 8% of total gross receipts and making addition of Rs.9,94,137. b) That in any view and circumstances of the assessee's case the provisions laid down under section 145 (3A of the Act are inapplicable and the book result declared by the assessee being quite reasonable even on the basis of past established history, hence there arises no occasion for rejection of books of account and application of 8% net profit rate and therefore the addition of Rs.9,94,137 is unsustainable. c) That the provisions laid down under section 44AD of the Act are not applicable over the assessee's case. 4. That without prejudice to the foregoing grounds, in the alternative: - a) the authorities below could not justify the adoption of 8% net profit rate in the type of business carried on by the assessee, without quoting any comparable case or without assigning any logical or rational reason.

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b) the authorities below should have allowed depreciation, interest paid to bank and third parties on borrowings for the purposes of business, more so in the light of the circular of CBDT and various authoritative' decisions on such issue. c) in view of settled law income from interest on fixed deposits which have been furnished as security in terms of contract should have been considered as "Income from business'. 5. a) That the revised income from business being computed strictly in accordance with the relevant provisions of law the same should have been accepted by the learned authorities below for all the purposes. b) That the learned authorities below have erred both in law and on facts in unilaterally brushing aside the revised income from business during the course of assessment proceedings, even without assigning any logical/rational reason for the same. 6. That the learned authorities below have erred both in law and .on facts in charging interest under ss. 234A, 234B and 234C and initiating penalty proceedings U/S 271(1) (c) of I.T. Act, 1961. 7. That the appellate order dated 17tri March, 2016 passed by the learned CIT (A) -I, Agra is against the law and facts of the assessee's case. The appellant also seeks permission to modify and/or adduce any other ground/grounds of appeal as the circumstances of the case might require or justify.

ITA No. 201/Agra/2016

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legitimate needs of business, business expediency and past established history with regard thereto, these should have been allowed as business expenditure. b) That the purchases of material are properly supported and verifiable with reference to the bills/invoices in case of registered dealers/suppliers and vouchers in case of non registered dealers/suppliers and further these vis-a-vis volume of the job/work done, were quite comparable thus, these should have been accepted. 3. That the assessee, by furnishing/producing various evidences/material has duly discharged the onus laid on him to establish the genuineness of transactions in sundry creditors accounts, thus, in case of doubt, the authorities below should have examined them by issuing summons under section 131 of the Act, more particularly when specific request with regard thereto has been made by the assessee. 4. a) That the learned CIT(A)-I, Agra has erred both in law and on facts in upholding the rejection of the books of accounts by invoking the provisions laid down under section 145(3) of the Act and estimation of net profit @ 8% of total gross receipts and making addition of Rs.14,05,188. b) That in any view and circumstances of the assessee's case the provisions laid down under section 145(3) of the Act are inapplicable and the book result declared by the assessee being quite reasonable even on the basis of past established history, hence there arises no occasion for rejection of books of account and application of 8% net profit rate and therefore the addition of Rs.14,05,188 is unsustainable. c) That the provisions laid down under section 44AD of the Act are not applicable over the assessee's case. D, That without prejudice to the foregoing grounds, in the alternative :- a) the authorities below could not justify the adoption of 8% net profit rate in the type of business carried on by the assessee, without quoting any comparable case or without assigning any logical or rational reason,

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b) the authorities below should have allowed depreciation, interest paid to bank and third parties on borrowings for the purposes of business, moreso in the light of the circular of CBDT and various authoritative decisions on such issue. c) in view of settled law income from interest on fixed deposits which have been furnished as security in terms of contract should have been considered as "Income from business'. d) the other income declared under the head 'Income from other sources' should have been considered as ^Income from business' , more so when during the year the assessee apart from business has no other source of income. e) the learned CIT(A)-I, Agra should have allowed the telescopic adjustment of trading addition with the other income voluntarily declared by the assessee. 6. That the authorities below while computing the assessed income has wrongly included interest income from bank FOR of Rs .2,53,050 twice. The assessed income deserves to be modified accordingly. 1. That the learned authorities below have erred both in law and on facts in charging interest under ss. 234A, 234B and 234C and initiating penalty proceedings U/S 211(1)(c) of I.T. Act, 1961. 8. That the appellate order dated 20th June, 2016 passed by the learned CIT (A) -I, Agra is against the law and facts of the assessee's case. The appellant also seeks permission to modify and/or adduce any other ground/grounds of appeal as the circumstances of the case might require or justify.

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a) the authorities below could not justify the adoption of 8% net profit rate in the type of business carried on by the assessee, without quoting any comparable case or without assigning any logical or rational reason and by complete disregard to the past established history.

b) the authorities below should have allowed depreciation, interest paid to bank and third parties on borrowings for the purposes of business, more so in the light of the circular of CBDT and various authoritative decisions on such issue cited by the assessee.

c) in view of settled law income from interest on fixed deposits which have been furnished as security in terms of contract should have been considered as `Income from business’. the other income declared under the head ‘Income from other d) sources’ should have been considered as ‘Income from business’,

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more so when during the year the assessee apart from business has no other source of income.

e) the learned CIT(A)-I, Agra should have allowed the telescopic adjustment of trading addition with the other income voluntarily declared by the assessee.

That the appellate order dated 30th March, 2016 passed by the 7. learned CIT(A)-I, Agra is against the law and facts of the assessee’s case.

The appellant also seeks permission to modify and/or adduce any other ground/grounds of appeal as the circumstances of the case might require or justify. 3. From the grounds of appeal, there are two issues crystalized for adjudication in both the appeals of the assessee as follows: 1. Estimation of net profit @ 8% of total gross receipts after rejection of the books of account by invoking the provisions laid down under section 145(3) of the Act, leading to addition of Rs.14,05,188/-. 2. Assessment of interest income from bank FDR of Rs.2,53,050 under the head income from other sources and resultant double

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addition as being claimed to be shown by the assessee as business income in the business receipts.

Brief facts as per record are that the After considering the assessee’s reply 4. and perusal of bill/voucher of expenses and purchase, the Assessing Officer (hereinafter referred to as “the AO”) found that the vouchers are self made and paid in cash which is fully not verifiable. He has noted that during Assessment Year 2009-10 assessee’s case was completed u/s 143(3) @ 8% on gross receipt as agreed by the assessee. For the Assessment Year 2010-11 assessee’s case was also completed @ 8% on gross receipt after rejecting the books of accounts for the reasons that assessee’s bill/vouchers were fully not verifiable. Similarly,for the Assessment Year 2011-12, the assessee’s books of accounts were rejected u/s 145(3) of the Act and income was estimated @ 8% on gross receipts after distinguishing case laws relied upon by the assessee where the AO noted that “the case laws given by assessee is not applicable in his case because fact of the case is different”. Accordingly, the AO applied 8% net profit rate on gross contract and assessed business income besides treating Bank FDR interest income as income from other sources in both the assessment years under consideration.

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5.2 Assessee during the course of appellant proceedings filed details of various submissions that were made before the AO. Here it is important to mention that assessee was given various opportunities to file submissions in support of grounds of appeal taken on 17.11.2015, 10.12.2015, 31.12.2015, 13.01.2016, 29.01.2016 and 29.02.2016 but no specific written submissions were made. On 15.03.2016 although detailed submissions and explanations were filed for A.Y. 2010-11 but for this assessment year the paper book filed only contained:- Computation of Total Income, Audit Report U/S 44AB of I. T. Act, 1961, Audited Trading & contract A/C, Audited Profit & Loss A/C, Audited Capital A/C of Proprietor, Recasted Gross Profit & Net profit, Profit & Loss A/C (Revised), Computation of Total Income (Revised), Copy of Purchase A/C showing registered and unregistered purchase, Details of item wise registered and unregistered purchase, Details of Direct Expenses, Copy of UPTT Assessment Order, Copy of written submissions filed during the course of assessment proceedings:- Dated 28.10.2013, Dated 13.12.2013, Dated 22.01.2014, Dated 10.02.2013, Detail type of Work and Place. 5.3 I have gone through the assessment order and submissions of the assessee and legal position in this regard, It is seen that similar issue had come up for consideration in A.Y. 2010-11 and it was noticed by the AO that assessee has not been maintaining supporting bills and vouchers of major expenses and the major purchases were also made from sister company in cash or from some unregistered sellers for cement, electric goods, paint, iron, brick, sand gitti etc, for which again proper bills were not available and hence assessee has agreed

I.T.A Nos. 200 & 201/Agra/2016 10

before AO for such addition at the rate of 8%. Now contending the issue in appeal after agreeing for such addition is not justified. Had assessee not agreed for such application of rate at 8% of gross contract receipts, during the assessment proceedings AO would have carried out detailed investigation in respect of purchases, sundry creditors and other expenses, as was done in the A.Y. 2010-11. It is a matter of fact that assessee has not been maintaining proper bills and vouchers, hence by agreeing to such addition, assessee created the circumstances to block the further investigations in the case. 5.3.1 Assessee was maintaining self made vouchers where payments were made in cash. In these vouchers complete addresses of parties were not mentioned. Some of the vouchers that were produced before me for A.Y. 2010-11 were found to be made in cash throughout the year in smaller denominations of Rs.15.000/-, 16,000/-, 17,000/- or 18.000/- in round figures. This in itself showed non-verifiable nature of various parties from whom the purchases were made. Assessee has himself given the percentage of purchases made from unregistered sellers. Under these circumstances there is no moral justification in going back on agreed addition and filing this appeal thereafter on such addition. 5.3.2 Under these circumstances, where majority of supporting bills and vouchers of the assessee are not verifiable and sundry creditors have also not been confirmed in A.Y. 2010-11 even if the books of the assessee are claimed to have been audited, the same cannot be relied upon. As per rule 6F of the Income Tax Rules, maintenance of proper books of accounts require maintenance of original bills and receipts in respect of each expenditure incurred,

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which is above Rs. 50/-, and the payment vouchers in respect of such expenditure are required to be prepared and signed by the relevant person. Since such details are not maintained by the assessee, AO is correct in rejecting the books of accounts and compute net profits by applying rate of 8% on gross receipts that was agreed by the assessee. Assessee has also contended that application of 8% rate is on a higher side, and has relied on various case laws, in this connection it is seen that estimation of profits even as high as 12% has been upheld by the Hon'ble Punjab and Haryana High Court in the case of CIT Vs M/s Prabhat Kumar 'Contractor, ITA No. 293 of 2008. There are also a number of judicial pronouncements, where the estimation of income ranging from 8% to 12.5% depending upon the facts of the case and nature of the contracts undertaken have been upheld including ITA No. 1787/Hyd/2011 M/s Hycons Infrastructure (india) Ltd and Bhaskar Reddy Vs. ITO, ITA No. 168/Hyd/06, dated 09.10.2007. In this context assessee has also raised the issue/ground that while applying the net profit rate at 8%, AO has not quoted any comparable cases. In the facts and circumstances of the case, when assessee is not maintaining proper bills and supporting vouchers in respect of various expenses and sundry creditors there cannot be a similar comparable case. Under these circumstances this can be treated as a no account case and drawing parallel from section 44AD. AO is justified in adopting a net profit rate of 8%.

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Accordingly, addition of Rs. 9,94,137/- made on this account is hereby confirmed. Assessee in Ground No. 7(d) has also raised the issue of allowing depreciation, interest paid to bank and third parties borrowings. But once the books of accounts are rejected and income is estimated at 8% of gross receipts by drawing parallel from section 44AD, then in tune with the provisions of this section, all the deductions allowable under the provisions of section 30 to 38, which include depreciation as well as interest paid on borrowings are deemed to have been already given full effect to and no further deduction under these sections is allowable to the assessee. In view of the foregoing expressed provisions of section 44AD, this ground of the assessee is hereby rejected. 6. Ground No. 7(b) relates to treatment of interest income as 'Income from Other Sources and not part of business receipts. 6.1 Legal position on this issue is very clear. In the case of Sterling Foods 237 ITR 53, (SC) the Apex Court has held that only when there is a direct nexus between the interest income and business exigency to keep such deposits in the bank, that interest income be treated as part of business income. However, in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd, vs CIT. 227 ITR 172 (SC), the Apex Court has held that interest from bank deposits could only be taxed as income under the head "Income from Other Sources" under section 56 of the Income Tax Act. In the context of export profits, it is held in the case of Nanji Topanbhai and Co. vs. ACIT, 243 ITR 192 (Ker)(2000) that interest being assessable as interest under the separate head "Income from Other Sources", the same cannot be

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treated as eligible export profits for the purposes of section 80HHC. Same view is taken by Delhi High Court in various cases. Interest on fixed deposits made for obtaining credit facilities for export business was excluded from the purview of export profits in CIT vs. Mrrrena Creations, 330 ITR 199(Delhi) following CIT vs Shri Ram Honda Power equip, 289 ITR 475 (Delhi) (2007). Similar view is held by Kerala High Court in the case of K. Ravindranathan Nair vs DCIT, 262 ITR 669 (2003). In view of the Apex Court decision in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd., it is held that the interest income is required to be taxed as "Income from Other Sources" under section 56 of the Income Tax Act, hence AO is correct in law in treating it as "Income from other sources." This ground of the assessee is therefore dismissed.

detailed paper book and synopsis which are placed on record. He submitted that

the judgement relied upon by the revenue are on different facts and hence not

applicable in the case of the assessee because in those cases either stock was not

maintained orthe books of account not produced despite various opportunities

provided to it by the AO or suppressed sales by inflating sales vouchers which was

not so in the case of the appellant. Thus, the facts of those caseswere entirely

different from the case of the present assessee because in the appellants case the

books of account were rejected U/S 145(3) of the Act simply because according to

AO the assessee furnished self made vouchers paid in cash.

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6.1 Further he referred to the past established history of its case, (pagePg.1) of the paper compilation filed on 8th October, 2018. From the perusal of the relevant chart, it is evident that since inception of business upto A.Y.2008-09, even in the scrutiny assessments the audited books of accounts regularly maintained by the assessee have been always accepted and slight variation have been made in the declared income; that for the very first time, in the scrutiny assessment for A.Y.2009-10 the rate of 8% net profit was applied because of the facts narrated at para 5 of assessee’s reply dated 2nd December, 2011, a copy of which is filed (APB, Pg. 148) of the paper compilation Volume I; that unfortunately during cleaning/shifting carried out in Deepawali season some of the bills/vouchers/records relating to direct expenses have got misplaced and inspite of the best possible efforts made they could not be traced out. On account of such reason beyond control of the assessee, some of the direct expenses are not

verifiable with reference to specific documentary evidence/material and thatafter mature deliberation and discussions with the concerned authority and legal consultant, the assessee to purchase piece of mind and to avoid any litigation hereby offers for completion of his assessment by applying 8% net profit rate on the contract receipts, subject to the condition that no penalty U/S 271(1)(c) and/or no penal action of whatsoever nature be kindly initiated/taken against the assessee

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and accordingly, while completing the assessment the net profit rate of 8% was

applied by the learned AO.

He further argued that the facts of the assessee’s case relevant to A.Y.2009- 6.2. 10 were peculiar, which are not existing in A.Ys.2010-11 and 2011-12 and thus not applicable on these years, when all the audited books of account and records have been produced and no defect could be found by the learned AO, apart from his uncalled for and unwarranted observations regarding self made vouchers; that it is settled law that mere fact that some expenditure was supported with self made vouchers, can never be the sole reason to reject books of accounts U/S 145(3) of the Act, as a whole. In case the AO was not satisfied about the authenticity of the support of some expenses, nothing prevented him from exploring the possibility of disallowance of such expenses; that in the assessment process, when the AO is scrutizing the account books, he has to do so objectively and judiciously and that it

is settled law that even if books of account and bills are not produced, the authorities below shall have to estimate the income of the assessee on reasonable basis considering the comparable cases or the past established history of the assessee.

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On the 2nd issue that for the Assessment Year 2010-1, the Ld. Counsel 7. submitted that the assessee has declared Rs.9,60,000 as income from other sources which should have been considered as ‘Income from Business’ by the learned AO, more so when during the year the assessee apart from business income had no other source of income. The assessee may be allowed the telescopic adjustment of trading addition with the other income voluntarily declared by the assessee and thereafter offered for taxation.

7.1 The ld. AR referred to internal page 5/Page 22 of the paper compilation of the assessment order U/S 143(3) of the Act dated 15.03.2013, from which it is evident that while computing the assessed income of the assessee, the learned AO has adopted the full interest income from banks, FDRs, NSC and other income declared at Rs.12,17,040 which duly includes interest income from FDR Rs.2,53,050, but added such interest income from FDR Rs.2,53,050 separately once again and thus arbitrarily assessed income from other sources at Rs.14,70,090 as against correct income from other sources at Rs.12,17,040.

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in support of application of net profit rate of 8% is quite reasonable to apply in the

cases after rejection of books U/S 145(3) of the Act.

for the assessment years under considerations.

10.1 It is noted that that asessee vide order sheet entry dated 22.01.2014, agreed for the application of net profit rate @ 8% which has been confirmed by the CIT(A) and dismissed the assessees appeal.The Ld. AR contended that the assessee’s admission of an estimated income at the NP rate of 8% which has been

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treated as if detected by the A.O. in compliance to show cause notice, during the

course of assessment proceedings has not been supported with corroborative documentary evidences to prove to the contrary, that it was not the offer of the assessee to show his bonafides that he is offering such income to avoid litigation, or to buy peace of mind. Thus, the fact as regards to the conditional admission of NP rate of 8% by the assessee either of his own or in compliance to the show cause notice during the course of assessment proceedings, has not been established.

10.2 The ld. CIT(A) has observed that the assessee has made an admission of 8% net profit rate before the A.O. vide order sheet entry dated 22.01.2014. The ld. CIT(A) action in confirming the net profit rate at 8% as admitted by the assessee before the A.O. vide order sheet entry dated 22.01.2014 as above, was justified, with the support of judicial precedent of Hon’ble Allahabad High Court where the Counsel of the appellant argued that at the time of assessment proceedings, the

assessee has given consent for acceptance of 8% of gross net profit only with a condition that no penal action shall be taken against him and therefore, when the penalty proceedings were initiated, he retracted with his consent. 10.3 The Ld. AR argued that the appellant has produced all books of account before the authorities below, but the same have wrongly been rejected. It is further submitted that since the nature of the business of the assessee is of the works

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contractor and in many cases, the payment has to be made in cash, for which

relevant bills cannot be produced, therefore, it is not a case of rejection of books of

account on that count. It is further submitted that the net profit has to be

commensurate with the previous years, in which the net profit of 6.7% has been

accepted and therefore, in the disputed year, the net profit of 8% is not justified.

business of wholesale trading of electrical goods and allied activities including

contract work, wherein the marging of profit is around 3%. His books of accounts

are audited and purchases and expenses are supported by proper bills/vouchers.

The major purchases are through banking channels. Even in case, where the

contract work has to be executed at remote areas, whereat the banking transactions

are not possible, the cash purchases are supported by bills prescribed by the

UPVAT authorities and these have been duly accepted in UPVAT assessment

relating to the impugned assessment years. He further submitted that appellant

vehemently objected the rejection of books of account U/s 145(3) of the Act and

estimation of net profit rate @ 8% simply on account of few cash expenses self

made vouchers alleged to be unverifiable and that too without any allegation that

these are false, bogus, excessive etc.; that the figure of net profit rate of 8% against

the declared net profit @ 3.03% declared in AY 2010-11 and 2.60% declared in

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AY 2011-12 by the appellant on the basis of audited books of account and other relevant records and by brushing aside the established past history of the appellant has been worked out in arbitrary manner; that in the impugned assessment years, the appellant neither before learned Assessing Authority nor before learned CIT(A) has agreed for the application of net profit rate @ 8%; that the appellant has contested the rejection of books of accounts U/S 145(3) of the Act on the basis of facts of his case and audited books of accounts and other relevant records maintained by him and relied on the following decisions :-

a) Dr. Prabhu Dayal Yadav Vs. CIT (2018) 89 taxmann.com 126 (Hon’ble Allahabad High Court) b) Commissioner of Sales Tax v. Vishnuchandra Vipin Chandra [1982] 50 STC 345 (Hon’ble Allahabad High Court) c) CIT Vs Prayag Wines (2014) 49 taxmann.com 528 (Hon’ble Allahabad High Court) d) DCIT Lucknow Vs. Hanuman Sugar (Khandsari) Mills Pvt.Ltd. (2013) 38 taxmann.com 53 (Hon’ble Allahabad High Court) e) Tolaram Daga Vs. CIT (1966) 59 ITR 632 (Hon’ble Assam High Court) f) ACIT Vs. S.K. Sharma Contractor, New Delhi ITA No.2673/Del/2012 (Hon’ble ITAT, Delhi Bench`G’) g) ACIT Vs. ITD Cementation India Ltd. (2013) 36 taxmann.com 74 (Hon’ble ITAT Mumbai Bench`I’) h) Agarwal Transport Service Vs. DCIT

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(2017) 88 taxmann.com 660 (Hon’ble ITAT Jodhpur Bench) i) CIT Vs.Suresh Kumar Bajoria (2009) 34 SOT 29 (Hon’ble ITAT Jaipur Bench `A”) j) Sammon Precision Mould Mfg.(India) Pvt.Ltd. Vs.ITO Ward 7(2) ITA No.2043/Del/2013 (Hon’ble ITAT Delhi Bench `G’) k) Umacharan Shaw & Bros. Vs. Commissioner Of Income-Tax (1959) 37 ITR 271 (Hon'ble Supreme Court) l) Radhasoami Satsang Vs. Commissioner Of Income-Tax (1992)193 ITR 321 (Hon’ble Supreme Court)

The appellant’s counsel has urged that it is settled law that after rejection 12. of books of accounts U/S 145(3) of the Act the AO may make assessment U/S 144 of the Act and for the same the past history of the assessee is the best guide and in support of such judicial proposition he relied on various judicial pronouncements.

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creditors or the expense voucher, how the authorities can be expected to carry out examination and verification of such transactions of the assessee. In the present case, though decision in the case of “Jugender Singh Yadav” Supra relied by the learned DR, is not squarely applicable to the facts of the appellant’s case, however such decision definitely has bearing over the such cases of estimation of income after rejection of books of accounts by way of invoking provisions of section 145(3) whether assessment order mention 143(3) or 144. Mere typing mistake or quote of section does render the assessment proceedings void. In view of peculiar facts of the case, it is fair and reasonable to apply a net profit rate of 6% on the gross receipt of the assessee for estimation of his business income for both the assessment years separately. Accordingly, the AO is directed to apply NP rate of 6% and thus this issue is partly allowed in favour of the assessee.

As regards to the 2nd issue that for the Assessment Year 2010-11, the 14. assessee may be allowed the telescopic adjustment of trading addition with the other income voluntarily declared by the assessee and thereafter offered for taxation as submitted by the Counsel that the assessee has declared Rs.9,60,000 as income from other sources which should have been considered as ‘Income from Business’ by the learned AO, more so when during the year the assessee apart from business income had no other source of income.

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return of income from bank interest as against adoption of the full interest income

from banks, FDRs, NSC where other income declared by the assessee at

Rs.12,17,040 duly includes interest income from FDR Rs.2,53,050, as claimed but

added such interest income from FDR Rs.2,53,050 separately once again in

arbitrarily way. The AO may examine and assessed correct income from other

sources at Rs.12,17,040 as against Rs.14,70,090 claimed by the ld. Counsel for the

assessee after verification.

as above.

Order pronounced in the open court on 12/04/2021.

Sd/- Sd/- (LALIET KUMAR) (DR. M.L. MEENA) JUDICIALMEMBER ACCOUNTANTMEMBER *doc* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT Sr. Private Secretary ITAT, Agra