ARUN KUMAR JAISWAL,KOLKATA vs. INCOME TAX OFFICER, WARD - 2(1), ASANSOL

order

: May 12th, 2023 ORDER

Per Manish Borad, Accountant Member:

1. That on the facts and circumstances of the case the order of the Ld. Assessing Officer in bad in Law.

2. That the Ld Assessing officer wrongly added Rs1234580/- as difference in gross profit on estimated. basis without any basis or in cooperation with other same nature of business. So addition made by the Ld Income Tax officer may please be deleted.

3. That the Ld. Assessing officer has added Rs. 7002523/-as bulk agency bonus, where no such bonus actually received by the assessee. So addition may please be deleted.

4. That the Ld. Assessing officer has added Rs 423612/- on the grounds that the cash payment has been made by your assessee in excess of Rs 20000/- by invoking section 40A(3) read with Rule -6DD. But the Id. ITO has failed to bring any records which prove transaction made between the assessee and the party to whom payment was made is not genuine. So in this case fact is that there is no dispute that the cash payments were made to the suppliers by your assessee. And due to urgent business expediency sometimes it is require making payment by cash. It is also established by the Honhle ITAT, Kolkata :B: Bench, in (KOL) of 2001 vide its order dated 28-06-2004 in the case of Britannia Industries Ltd. Vs JCIT for the A.Y 1997-98 in which on similar facts the addition made u/s 40A(3) was deleted by holding that cash payment was made for business expediency in view of the aforesaid premises it is prayed that your Honour may be pleased to delete the additions made in the assessment order u/s. 143(3) of the Income Tax Act, 1961 passed by the Id. Assessing Officer in abundant disposition of justice in consonance with law.

5. That further grounds may be adduced at the rime of hearing of the appeal.”

3. We have heard rival contentions and perused the records placed before us. The grievance of the assessee is solely with regard I.T.A. No.: 1178/KOL/2019 Assessment Year: 2007-08 Arun Kumar Jaiswal. to the addition sustained by ld. CIT(A) applying 1% gross profit rate as against 0.55% declared by the assessee. Facts in brief are that the assessee is an individual and is a sub-distributor of lottery tickets. Income of Rs. 1,04,900/- declared in the return filed for AY 2007-08 on 01.11.2007. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) & 142(1) of the Act. So far as the issue under appeal is concerned, we observe that the assessee has declared gross sales of Rs. 8,51,42,975/-. Gross profit rate of 0.55% declared in the financial statement. Against such gross profit in expenses have been claimed. Ld. AO called for the relevant documents including invoices and sales vouchers to verify the claim of the assessee of having shown 0.55% gross profit rate. The assessee was unable to satisfy ld. AO with the relevant details. Ld. AO accordingly concluded the assessment estimating gross profit at the rate of 2% of the total turnover and computed the income accordingly. When the matter travelled before ld. CIT(A), the assessee again failed to file the necessary details. Ld. CIT(A) also observed that the books of accounts contain certain lapses and errors as highlighted in the assessment order which the appellant could not controvert. He, however, partly allowed the grounds raised by the assessee applying the gross profit rate of 1% as against 2% made by ld. AO.

4. Before us, ld. Counsel for the assessee submitted that complete details have been filed and in this type of business, the gross profit margin is very low. In the written submission ld. Counsel for the assessee referred to the order of Settlement Commission bearing No. 1/11/16/95-96/IT pertaining to a