- (1.) Being aggrieved by the order passed by the Income Tax Appellate Tribunal, Circuit Bench, Ranchi in I.T.A. No. 205/Pat/2000 dated 14.6.2006, the Revenue has preferred this appeal raising the following questions of law:- (i) Whether on the facts and in the circumstances of the case, the ITAT was justified in holding that there was no justification for rejection of accounts in spite of the fact that the A.O. had clearly noted that sales were not verifiable from the accounts and the Bombay High Court had held in the cases of Bombay Cycle Store Co. Ltd. Vs. C.I.T., 1958 33 ITR 13 & A. Musa & Sons Vs. C.I.T., 1953 23 ITR 73 that rejection of account books was valid under these circumstances? (ii) Whether on the facts and in the circumstances of the case the ITAT was justified in holding that addition u/s. 68 was not correct particularly in respect of the cash creditors viz. Shailendra Singh, Radheshyam Kunwar, Ram Babu Singh & Ram Singh?
(2.) The assessee is a coal dealer. In course of the assessment proceedings for the assessment year 1996-97, the Assessing Officer found that there were some defects in the books of accounts of the assessee and they were not properly tick-marked and the Assessing Officer, therefore, doubted the correctness of the books of accounts of the assessee and rejecting the same under Section 145(2) of the I.T. Act, has raised the sale amount by 20% and the gross profit has been taken at 10% as against 5.92%. Such action of the Assessing Officer has resulted in an addition of Rs. 7,21,717/-.
(3.) In the appeal preferred by the assessee, C.I.T.(Appeals) deleted the addition of Rs. 7,21,717/- made under Section 145(2) observing that the addition has been made by the Assessing Officer entirely on mere suspicion and since the assessee is maintaining the accounts at regular basis and there is no deviation from any known system of accounting during the year under consideration as well as in the earlier years, the addition made by the Assessing Officer was not justified and accordingly C.I.T.(Appeals) deleted the addition.;