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2016 (9) TMI 1335 - AT - Income TaxN.P. rate determination - Held that - The assessee submitted that he earned his commission income of ₹ 61,546/- @3% after deducting various expenses. Therefore, the AO estimated NP of 10% on turnover of ₹ 3,07,73,348/- and made the addition of ₹ 30,73,334/-. I further find that assessee had not disclosed these transactions in return of income and neither at assessment nor at appellate stage did he submit any cogent evidence that these transactions relate to commission income. Therefore, Ld. CIT(A) applied NP rate of 8% instead of 10%, which is quite reasonable and justifiable and rightly sustained the addition to the extent of ₹ 24,61,867/- and accordingly, the assessee gets a relief of ₹ 6,11,467/-, which does not need any interference on my part, hence, WE uphold the order of the Ld. CIT(A) on the issue in dispute and accordingly, the appeal of the Assessee is dismissed.
Issues Involved:
1. Addition of undisclosed turnover and application of Net Profit rate. 2. Disallowance of certain expenses. 3. Charging of interest under Income Tax Act. 4. Reduction of Net Profit rate by CIT(A). 5. Appeal against the impugned order. Issue 1: Addition of Undisclosed Turnover and Application of Net Profit Rate: The case involved the assessee not disclosing a turnover of &8377; 3,07,73,348/-, leading to the assessing officer (AO) applying a Net Profit (NP) rate of 10% and making an addition of &8377; 30,73,334/-. The CIT(A) partly allowed the appeal for statistical purposes and reduced the NP rate to 8%. The Tribunal upheld the CIT(A)'s decision, stating that the assessee failed to provide sufficient evidence for transactions related to commission income, leading to the adjustment in the NP rate. Issue 2: Disallowance of Certain Expenses: The assessee contended that certain expenses, including payments to Mandi Samiti Shulka and Vikas Cess, were not allowed by the CIT(A) without proper consideration of the facts. However, the Tribunal did not specifically address this issue in the judgment, as the main focus was on the turnover and NP rate adjustments. Issue 3: Charging of Interest under Income Tax Act: The AO charged interest under sections 234A, 234B, and 234C of the Income Tax Act, which the CIT(A) did not reverse. The Tribunal did not provide detailed reasoning on this issue in the judgment, but it was mentioned as one of the grounds of appeal by the assessee. Issue 4: Reduction of Net Profit Rate by CIT(A): The assessee challenged the reduction of the NP rate from 10% to 8% by the CIT(A), arguing that even 8% was on the higher side and should be further reduced. The Tribunal, however, upheld the CIT(A)'s decision, considering it reasonable and justifiable based on the disclosed turnover. Issue 5: Appeal Against the Impugned Order: The assessee appealed against the impugned order, primarily disputing the NP rate adjustment and the addition based on undisclosed turnover. The Tribunal dismissed the appeal, upholding the CIT(A)'s decision on the NP rate adjustment and the addition, emphasizing the lack of evidence provided by the assessee regarding commission income transactions. In conclusion, the Tribunal's judgment focused on the undisclosed turnover, application of the Net Profit rate, and the CIT(A)'s decision to reduce the NP rate. The Tribunal upheld the CIT(A)'s order, emphasizing the importance of providing substantiated evidence for income transactions and justifying the adjustments made during assessment.
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