INCOME TAX OFFICER- 4(1)(1) , ALIGARH vs. SANJAY SINGH, ALIGARH

The assessee’s case was scrutinized to verify business purchases and quantitative details. In the absence of any response as forthcoming from the assessee, Ld. AO added opening capital, opening stock, sundry creditors and cash deposits to the income of the assessee. All the four items aggregated to Rs.12.84 Crores. The Ld. AO also rejected the books of accounts and estimated the income @10% of turnover which resulted into another addition of Rs.7.88 Crores.

Upon further appeal, Ld. CIT(A) substantially confirmed the assessment except for deletion of addition of sundry creditors, opening stock and cash deposit for Rs.12.73 Crores. The same was on the ground that the when income is estimated basis by rejecting the books of accounts, no further addition for these items could be made on the basis of same books of accounts as held by Hon’ble Rajasthan High Court in the case of Malpani House of Stones vs. CIT (395 ITR 385) as well as the decision of Hon’ble Gujarat High Court in the case of Vijay Trading Co. vs. ITO (76 Taxmann.com 366). Aggrieved, the revenue is in further appeal before us. 4. From the assessment order, it is quite clear that Ld. AO has rejected the books of accounts and estimated the business income of the assessee. In such a case, separate addition of sundry creditors, opening stock and cash deposit is not warranted since the same are in the course of assessee’s business only. The same are reflected in the very books of accounts which have been rejected by Ld. AO. In such a case, adding the same again would amount to double addition which is impermissible. The case laws as cited by Ld. CIT(A) duly supports this view. Therefore, we do not find any reason to interfere in the same. stand dismissed.