9911796707
Advanced Search 
TMI Blog2015 (1) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of depreciation (as discussed above) Rs.7,61,561 (iii) Difference in turnover (as discussed above). Rs.8,68,101 (iv) Difference in interest (as discussed above). Rs.2,01,150 (v) Disallowance of agricultural income (as discussed above) Rs.6,67,428 3. Against the Order passed by A.O. under section 143(3), an appeal was preferred by assessee before the Ld. CIT(A) challenging the additions made therein to his total income. After considering the submissions made by assessee as well as material available on record including the remand reports submitted by A.O., the Ld. CIT(A) sought to exercise his powers to enhance the income of assessee as computed by A.O. Accordingly, he issued a notice to the assessee which read as under : "In this regard, you are required to explain how the sundry creditors shown in the books of account and reflected in balance sheet could be presumed that they are not reflected in books of account. further, it has been held by the catena of judicial decisions, that cash credits can be assessed even when business income is estimated and there is nothing in law to prevent the A.O. in taxing both, after rejection of books being unreliable and it is for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the amounts attributable to such parties deserve to be treated as unexplained credits, even without going into the third and important aspect of the cash credits, i.e. the creditworthiness of the creditor. In this case, the appellant could not explain the credits with reference to the identity of the creditors, their creditworthiness apart from the genuineness of transactions which were nothing but cash credits/deposits in the books of appellant, except in the case of Mr. Praveen Rao, for an amount of Rs. 13,00,000/- Further, a credit of Rs. 10,00,000/- was treated to have been explained through agricultural income of the appellant and accepted by the assessing officer, thereby leaving a balance of Rs. 83,36,000/- which deserved to be treated as unexplained credits, as per the provisions of Sec. 68 of the Income-tax Act. In fact, the appellant given up in explaining the cash credits. and felon estimation of profits of the business, on the ground that books of account are not reliable and correct profits cannot be ascertained on the basis of such books. On these lines, it can be held that the amount of Rs. 83,36,000/- which were brought into the books of account of assessee, are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timate the profits of business at 8% on a total business receipts of Rs. 11,90,32,243/-. However, the appellant has not explained or indicated the reasons or basis for adopting the estimated rate of profit at 8%. No details in this regard are forthcoming. Hence, on the proposed lines of show cause notice dated 09.0l.2014, the net profits on business receipts need to be adopted at 12%. Accordingly, the assessing office)" is directed to compute the profits @ 12% on business receipts, while quantifying the correct business receipts. The depreciation as requested by the appellant in his submissions is not allowable, as per the decision of ITAT in the case of C. Eswara Reddy and Others, where the profit was deemed to have been calculated at the net of depreciation, and as such no separate deduction on account of depreciation is allowable in this case. 6.11. As indicated, the appellant requested for estimation of the business profits, holding the books of account to be unreliable, without any reference to the additions, to the extent of Rs. 83,36,000/-, on account of treating the ca.sh credits, as unexplained. Further, the appellant failed to respond to the letter dt.09.01.2014, wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminary issue raised by Ld. Counsel for the assessee is that the impugned order has been passed by Ld. CIT(A) enhancing the income of assessee without giving proper and sufficient opportunity of being heard to the assessee. In support of this stand, an affidavit of assessee is filed by Ld. Counsel for the assessee affirming on oath as under : "1. I am the appellant in Appeal No.0397/2011- 12/CIT(A)-VI and I am fully conversant with the facts of the appeal as well as the progress of the appeal proceedings, as I have been accompanying my Advocates during such proceedings. 2. My Counsel Dr. C.P. Ramaswami informed me in the second week of January 2014 that he had received a notice for enhancement from the office of the CIT (Appeals)-VI, Hyderabad, posting the case for the next date of hearing on 30 January 2014. 3. When I enquired whether my counsel would be filing any written submission on the enhancement notice, he said that he would make oral submissions thereon on the date of hearing and that he was going to rely on a Supreme Court decision reported in Volume 72 at page 1.94 on the issue raised in the notice for enhancement. 4. On 30 January 2014 I reached IT Towers around 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
