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2016 (6) TMI 1330 - AT - Income TaxEstimation of income - assessee is a wholesale dealer in liquors - as contended that the assessee is a wholesale dealer in liquors and majority of the sales are to be wholesale consumers wherein profit margin is 2% only and hence, the A.O. is not justified in estimating the income/profit at 5% - Held that - The assessee has not placed grounds and statement of facts filed before the CIT(A) and even in Form-36 the address to which the notice may be sent to the respondent was also wrongly mentioned as Commissioner of Income Tax instead of furnishing correct address of the respondent. With regard to issue of estimation of income, the Ld. CIT(A) observed that no contrary decisions were placed on record and therefore, the Ld. CIT(A) followed the decision of ITAT in the case of ITO, Warangal vs. Shri P. Ramaiah and others 2013 (12) TMI 1001 - ITAT HYDERABAD . Though the assessee preferred an appeal before the Tribunal no reported decision was placed before us and no material whatsoever was furnished to contradict the findings of the A.O. as well as CIT(A). Under these circumstances, we do not find any infirmity in the order passed by the CIT(A) and therefore, dismiss the appeal filed by the assessee.
Issues:
1. Incorrect address furnished by the assessee leading to an ex parte disposal of the appeal. 2. Discrepancy in income estimation by the Assessing Officer. 3. Contention regarding unfair income estimation before the CIT(A). 4. Failure to provide correct address for notice in Form-36. 5. Lack of contrary decisions or material to challenge the income estimation. Issue 1: Incorrect Address Furnished by the Assessee The appeal by the assessee was directed against the Order passed by the CIT(A), Kurnool for the A.Y. 2011-2012. The assessee provided two different addresses, one in Form-36 and another in the grounds of appeal. As per the I.T. Rules, the notice should be sent to the address in Form-36. However, the notice sent to the address in Form-36 was returned unserved due to an insufficient address. Since the correct address was not provided, the appeal was disposed of ex parte. Issue 2: Discrepancy in Income Estimation The Assessing Officer estimated the income of the assessee at 5% of the purchase cost, resulting in a higher income compared to what the assessee declared. The AO based this estimation on the lack of sales support by bills, even though purchases were from a specific corporation. The AR of the assessee remained silent when presented with this proposal, neither accepting nor objecting to it. Issue 3: Contention Regarding Unfair Income Estimation Before the CIT(A), it was argued that the income estimation by the AO was unjust and not connected to the case's facts. The contention was that as a wholesale dealer in liquors, the profit margin was only 2% for majority sales to wholesale consumers, making the 5% estimation unreasonable. Issue 4: Failure to Provide Correct Address The assessee failed to furnish the correct address for notice in Form-36, leading to confusion and unserved notices. Additionally, the address for the respondent was wrongly mentioned as 'Commissioner of Income Tax' instead of the correct address. Issue 5: Lack of Contrary Decisions or Material The CIT(A) noted that no contrary decisions were presented to challenge the income estimation. The CIT(A) followed a previous ITAT decision and dismissed the appeal as no reported decision or material was furnished before the Tribunal to contradict the AO's findings. In conclusion, the appeal was dismissed due to the lack of infirmity in the order passed by the CIT(A) and the absence of contrary decisions or material to challenge the income estimation.
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