Bhrugesh Dienshbhai Shah Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that addition on account of cash credit in the current year cannot be sustained where department had accepted the re-payment of loans in subsequent year. Accordingly, addition confirmed by CIT(A) deleted and appeal allowed.
Facts- The assessee is an individual and proprietor of Ruchit Enterprise engaged in chemical trading business. The return of the assessee was selected for scrutiny assessment and various additions were made by AO. CIT(A) partly allowed the appeal of the assessee. Being aggrieved, both assessee and revenue has preferred the present appeal.
Conclusion- Held that revenue could not place on record the rejection of books of accounts merely based on non-furnishing of supporting evidences, namely, not submitting contra confirmation, details of purchase and sales. Furthermore, the Revenue could not controvert the submission that there was increase in the price of raw materials which are resulted in reduction of GP, whereas, the actual GP is 1.18% as per the audited financial statement. Similarly, disallowance of business expenses at 25% is not justified by the AO with any material evidences but only on adhoc basis. Thus, we do not find any infirmity in the deletion made by the CIT(A).
