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TMI Blog2012 (7) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... im that both the entities of AOP is to be assessed separately is found to be afterthought because no return of income for the assessment year under appeal was filed for AOP. The return of AOP was filed for the first time for subsequent assessment year 2005-06 after completion of assessment of assessee. Thus, no reliance can be placed in the assessment year under appeal that any valid AOP exists as claimed by the assessee - as the assessee did not file the allotment letter of D.M. in respect of shop and no documentary evidence has been filed in support of any of the contentions. The CIT(A) was justified in upholding that both the shops were operated and owned by the assessee and estimate of profit of both the concerns in the hands of the assessee was justified - estimation of the figure of net profit at Rs.3,00,000/- which was in proportion to the income declared by the assessee in the return of income on the basis of declared purchases was correct - against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... preferred within time. The ld. DR has no objection for condoning the nominal delay in filing the appeal. Considering the explanation of the assessee and that the ld. DR has no objection for condoning the nominal delay, we are satisfied that the assessee had a sufficient cause for not filing the appeal within the period of limitation. Therefore, the delay in filing the appeal of 3 days is condoned. 4. The facts of the case are that the assessee filed return of income at Rs.95,000/- in the status of individual. The case was selected for scrutiny and according to the observations in the assessment order, the assessee did not cooperate with the AO at the initial stage of assessment. Therefore, summons u/s. 131 was issued and in reply thereto, the counsel for the assessee appeared and he was required to file explanation and details of purchases and sales, bills/vouchers of expenses, household withdrawals, details regarding license fees and source of investment thereof and the details of UCO Bank. Again on the date of hearing nobody attended the proceedings before the AO and on further notice, the counsel for the assessee appeared and he was required to furnish the relevant details of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order. Accordingly, the income of the assessee was computed at Rs.10,51,810/-. 4.2 The assessment order was challenged before the ld. CIT(A) and written submissions of the assessee is reproduced in the appellate order and the gist of the submissions of the assessee before the ld. CIT(A) had been that the AO has wrongly clubbed the purchases of assessee and separate licensees M/s. Sanjay Pandey and Rajeev Kumar Pandey, who were doing the same business in the premises at Avas Vikas Colony. It was stated that the assessee is doing business only at Lal Darwaja, Farrukhabad. Therefore, the purchases of both the persons should not be taken together and, therefore, estimate of sales is unjustified. It was submitted that the assessee is doing proprietary business and M/s. Sanjay Pandey and Rajeev Kumar Pandey are doing business as AOP and the assessee is one of the Member of AOP. It was explained that the details could not be furnished before the AO due to non-appearance of assessee's counsel on several hearing because of the serious illness of the assessee. The assessee in order to prove that he was doing business only at Lal Darwaja shop, furnished copy of the allotment letter i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed rejoinder to the remand report of the AO, but as regards para 2 of page 1 of the remand report, the assessee did not say anything because it was a matter of record of the AO. The assessee reiterated the same facts in respect of AOP in the rejoinder and prayed that there is a mistake in taking total purchases of both the concerns and that expenses of AOP should be allowed as deduction. 4.3 The ld. CIT(A), considering the explanation of the assessee in the light of the remand report of the AO and the material on record, restricted the computation of income at Rs.3,00,000/- and granted relief to the assessee in a sum of Rs.7,51,812/-. The findings of the ld. CIT(A) in the impugned order in para 6 to 7 are reproduced as under : "6. After having carefully considered appellant's submissions and also the facts brought out by the AO in the assessment order as well as in the remand report, my conclusions/observations are as under: 6.1. I find that all the issues raised by various grounds of appeal are interrelated, and, hence, all the grounds of appeal are being adjudicated together. 6.2. Whether there are two separate entities?: On this issue, the appellant is found to be on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll AO should have allowed a reasonable deduction for expenses, on estimate basis, for Awas Vikas Shop also. In fact, in such a case, AO should have simply, after rejecting book results; estimated and applied a reasonable N.P. to the Known figure of Purchases. N.P for Lal Darwaja shop was declared, and accepted also by AO, at Rs. 95,000/- on purchase of Rs. 31,31,384/- on proportionate basis, N.P. on purchases for two shops, worked out by AO at Rs. 67,84,804/- would be Rs. 2,05,837/- But considering that appellant has failed in producing accounts of Awas Vikas shop; rather appellant was trying to hide it altogether; I hold that a reasonable estimate of total N.P would be Rs. 3,00,000/-. Thus, estimated addition, made by AO at Rs, 10,51,812/- is considered excessive, and is restricted/reduced to Rs. 3,00,000/-. (Relief - Rs.7,51,812/-) The above takes care of all grounds of appeal. 7. In the result, appeal is partly allowed." 4.4 Both the parties are in appeals on the above grounds whereby the Revenue challenged the reduction of business income and the assessee seeks deletion of addition on account of estimation of profit. 5. The ld. DR relied upon the order of the AO. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r AOP. The return of AOP was filed for the first time for subsequent assessment year 2005-06 on 31.01.2007 after completion of assessment in the case of assessee on 28.12.2006. Thus, no reliance can be placed in the assessment year under appeal that any valid AOP exists as claimed by the assessee. When the above facts were confronted to the assessee at the assessment stage, the assessee did not say anything. Even nothing was stated at the appellate stage. The ld. CIT(A) called for the allotment letter of D.M. in respect of business at Lal Darwaja. The same was filed, but the allotment letter of D.M. in respect of shop at Avas Vikas Colony was not filed. Same is the position before us, as the assessee did not file any paper book before us and no documentary evidence has been filed in support of any of the contentions. The ld. CIT(A) was, therefore, justified in upholding and confirming the order of the AO that both the shops were operated and owned by the assessee and as such, estimate of profit of both the concerns in the hands of the assessee was justified. The ld. CIT(A) has already taken care of typing error in taking the figure of purchases. The assessee failed to produce the b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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