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TMI Blog2012 (7) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... l the expenditure genuinely and bonafide claimed by the assessee when the assessee has maintained proper books of accounts which were not disputed by the learned Assessing Officer and were subject to tax audit? 3. Whether the learned CIT(A) is justified in confirming the disallowance of expenditure on canteen amounting to Rs. 69,213/-, miscellaneous expenditure amounting to Rs. 8,469/-, expenditure on consumable goods amounting to Rs. 91,293/-, general expenses amounting to Rs. 27,482/- even after all the relevant books of accounts and supporting documents were produced before the learned CIT(A) and were duly observed by CIT(A) in para 5 on page 3 of the impugned order? 4. Whether the learned CIT(A) was justified in adding to the estimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l expenditure on consumable goods at Rs. 4,32,575/- and `Rs. 27,482/- out of general expenses of Rs. 43,208/-.Besides, the AO disallowed 1/10 th of car & telephone expenses as also depreciation on car. 3. On appeal, the ld. CIT(A) asked the assessee to produce the relevant books of account alongwith bills and vouchers. Since the assessee did not produce certain bills/vouchers as mentioned in para 5 of the impugned order, the ld. CIT(A) show caused the assessee as to why provisions of Section 145(3) of the Act be not invoked and net profit estimated at the rate of 20% of professional receipts. In response, the assessee replied that their case was not covered by the provisions of section 145(3) of the Act and that cash payments were made to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of these facts, the provisions of section 145(3) are applicable in this case and the net profit is required to be estimated. 17. As discussed above the appellant was asked to file the details of net profit rate shown in the last five years. In response the appellant has filed the following chart and stated as follows: A.Y. Net profit as per profit & loss a/c. (Rs.). Income from other sources (Rs.) Net profit from profession(Rs.) Turnover (Rs.) Net profit ratio 2007-08 884,725.99 63,363.50 821,362.49 9,016,474.50 9% 2006-07 824,778.67 65,201.80 759.576.87 8,260,556.10 9% 2005-06 600,829.04 63,854.55 536,974.49 6,645,029.00 8% 2004-05 525,707.08 51,236.11 474,470.97 2,048,125.87 23% 2003-04 575,863,77 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture has been claimed in respect of these receipts. Therefore, these receipts totaling Rs.63,364/- is to be added to the net profit from Sarthak Clinic. The net profit from Sarthak Clinic thus amounts to Rs.8,86,428/- (823064 + 63364). 19. Regarding income from Bimal Hospital, the appellant has shown net profit rate of 9% in the immediately preceding year. Considering the facts, the net profit from Bimal Hospital is estimated at 9% of the gross receipts. In Bimal Hospital, the appellant has shown gross receipts of Rs.57,88,772/-. At 9%, the net profit amounts to Rs.5,20,989/-. The total net profit from Sarthak Clinic and Bimal Hospital amounts to Rs.14,07,417/- (8,86,428 + 5,20,989). 20. As the profit has been estimated as per above discu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts, having recourse to provisions of sec. 145(3) of the Act and estimation of net profits. The ld. AR on behalf of the assessee while inviting our attention to affidavits dated 6.6.2012 of shri R.Mittal, CA and Dr. Illa Gupta submitted that the all the books of accounts and vouchers were produced before the AO and the ld. CIT(A) and thus, observations of the ld. CIT(A) in para 5(7),5(8),5(9),para 7 & para 10 of the impugned order are not correct and are denied..On the other hand, the ld. DR supported the findings of the ld. CIT(A) in the impugned order. 5. We have heard both the parties and gone through the facts of the case. As is apparent from the aforesaid findings of the ld. CIT(A), especially in para 10 of the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, keeping in mind, inter alia, the mandate of provisions of sec. 250(6) of the Act. The ld. CIT(A) is free to undertake any independent enquiries, found necessary in the case and shall also examine all the relevant books of accounts and vouchers. The assessee is also directed to produce all the books of accounts and vouchers ,particularly those mentioned in the affidavit of the CA before the ld. CIT(A) for expeditious disposal of the case. With these observations, ground nos. 1 to 4 in the appeal are disposed of. 6. Ground no.5 in the appeal relates to initiation of penalty proceedings under section 271D of the Act. Since mere initiation of penalty proceedings is not appealable, accordingly, this ground is dismissed. 7. No additional gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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