SHRI RAJ KUMAR ( M/S RADHIKA SALES CORP ), AMRITSAR vs. INCOME TAX OFFICER WARD- 3 (3), AMRITSAR

per Para 6.1 had added Rs. 27400000/- u/s 68 r.w.s 115BBE of the Act after allowing the credit of the sales made up-to October 2016 and the profit margin as worked out from the submission of the assessee. 4.1 The assessee filed its appeal and challenged the additions made by the AO. During the appeal proceedings the appellant did not file any submissions to support its grounds of appeal. As discussed above, the appellant has not complied with various notices issued in the course of appeal proceedings and also did not make any compliance during assessment proceedings. Therefore, it appears the appellant is not interested in prosecuting the appeal. In view of the above the various additions and disallowances made by the AO are upheld. The Grounds of appeal are dismissed.”

12. We heard the rival submission and relied on the documents available in the record. That the ld. A.O. had not disputed, the purchases, quantitative stock and sales for the entire period except October & November. It is pertinent to mention here that the assessee has duly submitted books of accounts, sale & purchase register, confirmations, bank statements, expenses, parties from whom the purchase and to whom sales were made. However, the Ld. AO has alleged that the appellant has inflated sales for the month of October &November, 2016. The total sales declared by the assessee was to be tune of Rs. 1,58,06,636/- and Rs. 1,53,63,687/- respectively. However, the ld. Assessing Officer has computed the sales for the month of October &November 2016 at Rs. 28,06,536/- and Rs. 9,63,687/- respectively. The Ld. AO while doing such exercise has ignored the fact as to why a prudent businessman will make purchases to the tune of Rs. 3,09,69,406/- in the month of October, 2016 much before the date of demonetization in order to execute such meagre sale as computed by the AO. The assumption drawn by the AO in respect of estimating the sales is merely on assumption or presumption or surmises or conjectures. Therefore, the Ld. AO has made addition of Rs. 2,74,00,000/- in the hands of the assessee by reducing the actual sales for the month of October, & November 2016. The basis of rejection of books was not acceptable here. We respectfully relied on the order of jurisdictional High Court in the case of Ludhiana Steel Rolling Mills Ltd, supra. The Ld. AO has made such addition without discharging the burden of prove the correctness of addition. It is a settled law that once the adequate evidence/material has been provided which prima facie discharge the burden of the assessee in that case, the burden shifts on the revenue and the revenue has not discharged its onus in these circumstances. Here, no addition can be called for. In this regard, the respectfully reliance is placed on the following case laws:

• K.P. Varghese vs ITO (1981) 7 Taxman 13 (SC) • A.S. Sivan Pillai vs. CIT (1958) 34 ITR 328 (Madras) • Roshan Di Hatti vs CIT 107 ITR 938 (SC),

• CIT, Faridabad v. Laul Transport Corporation, [2009] 180 Taxman 185 (Punjab & Haryana)