SH. MAM CHAND GOEL,NEW DELHI vs. ACIT, MEERUT

The grounds raised by the assessee are as under:- 1) On the facts and in the circumstances of the case and in law, the authorities below were incorrect and unjustified in making and confirming the addition of Rs. 7,28,000/- u/s 68 even though confirmation of both creditors of Rs. 5,78,000/- and Rs. 1,50,000/- alongwith PAN and other details were filed. 2) On the facts and in the circumstances of the case and in law, the authorities below were incorrect and unjustified in making and confirming the addition of Rs. 56,566/- merely on the basis of arbitraries and also on assumption and presumption. 3) On the facts and in the circumstances of the case and in law, the CIT (A) was wrong and incorrect in confirming the addition of Rs. 56,566/- to the trading account without funding any defect or incorrectness either in the books of account or any where in the final result filed and declared and also ignoring the facts that every asst. year is separate and independent.

4) On the facts and in the circumstances of the case and in law, the CIT (A) was wrong and incorrect and unjustified in upholding the action of the A0 u/s 144 as correct and justified. 5) On the facts and in the circumstances of the case and in law, the CIT (A) was wrong and incorrect and unjustified in holding that there was turnover where as the assesee is not engaged in the purchase and sale and that there is no question of estimation of any net profit rate. 6) On the facts and in the circumstances of the case and in law, the CIT (A) was wrong and incorrect and unjustified in holding that the assessee in income is Rs. 56,566/- as against declared commission income of Rs. 8,038/- without any proof and proving that the assessee has more commission income than declared.

Apropos ground no. 1 the ld. counsel of assessee submitted that the facts and in the circumstances of the case and in law, the authorities below were incorrect and unjustified in making and confirming the addition of Rs. 7,28,000/- u/s 68 even though confirmation of both creditors of Rs. 5,78,000/- and Rs. 1,50,000/- alongwith PAN and other details were filed. The ld. counsel submitted that the assessee had duly filed confirmation of accounts of Shri S.K Goel & M/s. Sarega Construction P Ltd. in compliance to the direction to the AO. The ld. counsel submitted that the credit entries were duly recorded the books of accounts and onus lay on the assessee was discharged by filing confirmations, address, PAN numbers of alleged to creditors therefore no addition was required to be made u/s. 68 of the Act.

The Ld. Senior DR supported the orders of the authorities below and submitted that the appellant could not establish identity and creditworthiness of the creditors therefore the AO was right in making addition u/s. 68 of the Act.

Placing rejoinder to the above, the ld. counsel submitted that after filing confirmations, addresses and PAN numbers of creditors the AO did not raise any query to the assessee nor any notices to the said two creditors were issue u/s. 133(6) or 131 of the Act and the AO without any further query or verification proceeded to hold that the assessee has not establish identity and creditworthiness of creditors therefore addition may kindly be deleted.

On careful consideration of above submission when the assessee has submitted names, addresses, PAN numbers & confirmations of both the creditors which was under his command and control then if the AO was not satisfied then he should have further show cause the assessee to submit some more evidence or he might have called the creditors directly by issuing notices under his authority. But the AO has not taken any action as noted above and disputed the identity and creditworthiness of the creditors 2

Apropos ground no. 2, 3, 5 & 6 the ld. counsel submitted that the facts and in the circumstances of the case and in law, the authorities below were incorrect and unjustified in making and confirming the addition of Rs. 56,566/- merely on the basis of arbitraries and also on assumption and presumption. He further submitted that the facts and in the circumstances of the case and in law, the CIT (A) was wrong and incorrect in confirming the addition of Rs. 56,566/- to the trading account without funding any defect or incorrectness either in the books of account or any where in the final result filed and declared and also ignoring the facts that every asst. year is separate and independent. The ld. Senior DR supported the orders of the authorities below.

On careful consideration of above, we are of the view that when the appellant did not produce books of accounts along with supporting bills and vouchers before the AO then the assessee cannot allege the contention that the AO did not point out any defects in the books of accounts as when the books of accounts are not before the AO then how could the AO have pointed out defects therein. Thus, in absence of books of accounts the AO was justified in estimating net profit and making addition of Rs. 56,566/- to the taxable income of assessee. We are unable to see any reason to interfere in the findings of the authorities below. Accordingly, ground no. 2, 3, 5 & 6 of assessee are dismissed. 9. The ld. counsel has not made any submissions on ground no. 4 hence in absence of any arguments the same is not being adjudicated.

In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 18.08.2023.