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Shri Naushad Ahmed, Shri Naushad Ahmed, Sadak Dudhli, Sadak Dudhli, Vs. Income Tax Officer, Income Tax Officer, Income Tax Officer,
December, 09th 2013
                                  `E' : NEW DELHI
                      DELHI BENCH `E

                         G.D.AGRAWAL, VICE PRESIDENT AND
                              JAIN, JUDICIAL MEMBER
                    SHRI A.D. JAIN,

                      Nos.593/Del/2013 & 594/Del/2013
                  ITA Nos
                             Years : 2003-
                 Assessment Years              2004-05
                                     2003-04 & 2004-

Shri Naushad Ahmed,            Vs.    Income Tax Officer,
S/o Shri Bhura Ahmed,                 Ward-2,
Village & PO Ghogreki,                Saharanpur.
Sadak Dudhli,
Saharanpur ­ 247 001.
     (Appellant)                         (Respondent)

              Appellant by      :    Shri Sandeep Sapra, Advocate.
              Respondent by     :    Shri Keyur Patel, Sr.DR.


     These appeals by the assessee are directed against the order of
learned CIT(A), Muzaffarnagar dated 2nd September, 2011 for the AY
2003-04 & 2004-05.

2.   In ITA No.593/Del/2013, the assessee has raised the following
grounds :-

     "1. On the facts & in the circumstances of the case the
     learned CIT Appeal has erred by applying GP rate on total
     credit summation in bank A/c.

     2.    On the facts & in the circumstances of the case the
     learned CIT Appeal has erred by holding the addition of
     Rs.105000/- in purchase of land."

3.   Similarly, in ITA No.594/Del/2013, the only ground raised by the
assessee reads as under:-
                                    2                    ITA-593 & 594/Del/2013

      "On the facts & in the circumstances of the case the
      learned CIT Appeal has erred by applying GP rate on total
      credit summation in bank A/c."

4.    At the time of hearing before us, it is stated by the learned
counsel that the assessee is a small businessman trading in raw hides
and skin.   Since in the year under consideration the income of the
assessee was below the taxable limit, he did not file the return but the
same was filed in response to notice under Section 148 of the Income-
tax Act, 1961. That the Assessing Officer made the huge addition of
`5,52,632/- by estimating the gross profit on the entire credit in the
bank account. It is stated by the learned counsel that the assessee
has maintained the regular books of account, he has prepared the
trading and profit & loss account and the income has been declared on
the basis of books of account. The Assessing Officer treated the entire
credit as sales while only part of the credit in the bank account is sales.
He further stated that if one opportunity is given, the assessee would
be able to explain each and every credit in the bank account.              He
further stated that though the Assessing Officer mentioned the
application of gross profit rate of 8%, but, in effect, he applied the net
profit rate because the entire profit worked out is added to the income
of the assessee. The Assessing Officer did not deduct there from even
the profit disclosed by the assessee as per books of account.              He
further submitted that the Assessing Officer also made the addition of
`1,05,000/- for unexplained investment in the purchase of plot. That
the withdrawal for the said plot is already debited in the assessee's
books of account. He, therefore, submitted that either the additions
made by the Assessing Officer should be deleted or the matter be set
aside to the file of the Assessing Officer for re-examination.
                                      3                ITA-593 & 594/Del/2013

5.    Learned DR, on the other hand, relied upon the orders of
authorities below and he stated that the Assessing Officer has
considered the entire facts and also examined the books of account
and, therefore, the addition made by the Assessing Officer and which is
sustained by the learned CIT(A) should be sustained.

6.    After considering the arguments of both the sides and the facts
of the case, in our opinion, it would meet the ends of justice if the
orders of authorities below are set aside and the matter restored to the
file of the Assessing Officer.      We order accordingly and direct the
Assessing Officer to allow adequate opportunity to the assessee to
explain the credit in the bank account. After examining the books of
account, he will decide whether the same is required to be accepted or
rejected as per Section 145. If the books of account are required to be
rejected, he will also allow opportunity to the assessee for explaining
the rate of gross profit/net profit which may be suitably applied in the
case of the assessee. Similarly, the Assessing Officer will also allow
adequate opportunity to the assessee to explain the source of
`1,05,000/- for purchase of land.         Thereafter, he will make the
assessment of both the years afresh in accordance with law.

7.    In the result, the appeals of the assessee are deemed to be
allowed for statistical purposes.
      Decision pronounced in the open Court on conclusion of hearing
on 3rd December, 2013.

                  Sd/-                                 Sd/-
            (A.D. JAIN)                         (G.D.AGRAWAL)
         JUDICIAL MEMBER                        VICE PRESIDENT

Dated : 03.12.2013
                                  4                 ITA-593 & 594/Del/2013

Copy forwarded to: -

1.   Appellant    : Shri Naushad Ahmed,
                 S/o Shri Bhura Ahmed,
                 Village & PO Ghogreki,
                 Sadak Dudhli, Kailashpur, Saharanpur ­ 247 001.

2.   Respondent : Income Tax Officer,
               Ward-2, Saharanpur.
3.   CIT
4.   CIT(A)
5.   DR, ITAT

                            Assistant Registrar
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