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TMI Blog2015 (3) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/- and under these facts, the turnover was estimated at ₹ 40 lacs. In our considered opinion, in the facts of the present case, when these two bank accounts are belonging to the assessee company and receipts as per these two bank accounts were not accounted for in regular books, the receipts as per these two bank accounts and as per books of account have to be added to estimate the gross receipt of the assessee company and therefore, estimation of gross receipts at ₹ 40 lacs is proper and reasonable. Applying net profit rate of 20% on the said estimated gross receipts of ₹ 40 lacs, we find that against receipt in the books of account of ₹ 26.30 lacs, the assessee has declared profit before depreciation of ₹ 2.53 lac, which worked out to 9.62%. Hence, we find force in the submission of Learned A.R. of the assessee that applying net profit rate @20% is excessive in the facts of the present case. We, therefore, hold that applying net profit rate of 10% will meet the ends of justice and hence, we direct the Assessing Officer to apply net profit rate of 10% on estimated gross receipt of ₹ 40 lac and in this manner, the assessee gets part relief of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nging to the assessee company, receipts of which were not included in the receipts as per books of account. We have already held that on such unaccounted receipts, profit @17% of gross receipts has to be taxed in the present year. The income was worked out by CIT(A) at ₹ 10,51,176/- as against the income declared by the assessee in the return of income at ₹ 1,54,956/-. In this manner, CIT(A) has confirmed an addition of ₹ 8,96,686/-. While deciding the appeal of the assessee, we have reduced this addition by ₹ 4.40 lac because we have directed the Assessing Officer to adopt net profit of 17% as against 25%. Hence, the additional income to be taxed in the present year remains only ₹ 4,56,686/- and therefore, the amount to be considered in assessment year 2006-07 should be ₹ 35,43,314/- being difference of ₹ 40 lac and ₹ 4,56,686/-. Except this modification, we decline to interfere in the order of CIT(A). - Decided partly in favour of assessee. Addition made on account of deposits in the benami account - CIT(A) deleted the addition - Held that:- stand of the Revenue is that total deposit in Benami account should be considered as inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. The learned CIT (A) was wrong in law on facts in holding that the bank account No.12050 7968 pertained to the appellant company. 4. In any case without prejudice to the above grounds, income of ₹ 6,03,277/- computed by learned CIT(A) is very high excessive. 5. The order of learned CIT(A) is against law, facts principles of natural justice. 3. It was submitted by Learned A.R. of the assessee that ground No. 1 is not pressed and accordingly, this ground is rejected as not pressed. 4. Regarding remaining grounds, it was submitted by him that the only issue involved is regarding estimating the income of the assessee at ₹ 8 lac by estimating the turnover at ₹ 40 lac and applying 20% net profit rate on this estimated turnover. He further submitted that against this estimated income of ₹ 8 lacs, deduction was allowed on account of depreciation to the extent of ₹ 2,10,593/- and in this manner, the income was estimated at ₹ 5,89,407/-. He submitted that the bank account No. 12505 and 7968 do not belong to the assessee company and therefore, this addition is not justified and regarding estimation of turnover at ₹ 40 lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts has been arrived at ₹ 38,73,965/- and under these facts, the turnover was estimated at ₹ 40 lacs. In our considered opinion, in the facts of the present case, when these two bank accounts are belonging to the assessee company and receipts as per these two bank accounts were not accounted for in regular books, the receipts as per these two bank accounts and as per books of account have to be added to estimate the gross receipt of the assessee company and therefore, estimation of gross receipts at ₹ 40 lacs is proper and reasonable. 8. Regarding applying net profit rate of 20% on the said estimated gross receipts of ₹ 40 lacs, we find that against receipt in the books of account of ₹ 26.30 lacs, the assessee has declared profit before depreciation of ₹ 2.53 lac, which worked out to 9.62%. Hence, we find force in the submission of Learned A.R. of the assessee that applying net profit rate @20% is excessive in the facts of the present case. We, therefore, hold that applying net profit rate of 10% will meet the ends of justice and hence, we direct the Assessing Officer to apply net profit rate of 10% on estimated gross receipt of ₹ 40 lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 i.e. I.T.A. No.407/Lkw/2012. In this appeal, the Revenue has raised the following grounds: 1. That Ld. CIT(A) has erred in law and on facts in deleting the addition of ₹ 20,00,000/- made on account of undisclosed income, without appreciating the fact that Dr. A.K. Shah has surrendered an amount of ₹ 20,00,000/- during the course of search as per his statement in the case of the assessee company. However, such income was never disclosed at the time of filing of the return. Accordingly, since the return of income was filed at ₹ 1,54,960/- without including the surrendered amount of ₹ 20,00,000/-, the A.O. was justified in making such addition. 2. That Ld. CIT (A) has erred in law and on facts in directing the A.O. to apply net profit rate of 25% even on unaccounted or undisclosed credit of ₹ 21,10,000/- in two bank accounts maintained in the name of Shri Tanmay Tewari, ignoring the fact that the credits in these two bank accounts represented net undisclosed income of the assessee. 3. That Ld. CIT (A) has erred in law and on facts in considering and allowing the surrendered amount of ₹ 40,00,000/- to be bifurcated in the ratio of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come cannot be assessed in the absence of any corroborating material and even on the basis of corroborating material, if the income liable to be taxed is less than the surrendered amount, then only such income can be taxed, which is proper on the basis of corroborating material. As per the material found in course of search, there were two bank accounts belonging to the assessee company, receipts of which were not included in the receipts as per books of account. We have already held that on such unaccounted receipts, profit @17% of gross receipts has to be taxed in the present year. The income was worked out by CIT(A) at ₹ 10,51,176/- as against the income declared by the assessee in the return of income at ₹ 1,54,956/-. In this manner, CIT(A) has confirmed an addition of ₹ 8,96,686/-. While deciding the appeal of the assessee, we have reduced this addition by ₹ 4.40 lac because we have directed the Assessing Officer to adopt net profit of 17% as against 25%. Hence, the additional income to be taxed in the present year remains only ₹ 4,56,686/- and therefore, the amount to be considered in assessment year 2006-07 should be ₹ 35,43,314/- being di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 47,15,484/-. The A.O. has not pointed out any discrepancies or inflation of expenditure in the accounts. As per the indication given by the advance tax paid by the assessee for the year under consideration and also the pattern of income offered to tax in earlier years, coupled with the fact that the assessee had not entered receipts totaling to ₹ 58,69,252/- in its computer at the time of search, it can be safely assumed that the income that would have been offered to tax, (if the search had not taken place), would have been in the vicinity of ₹ 3-5 lakhs. The assessee, after incorporating all the unaccounted receipts, has offered a taxable income of ₹ 44,04,380/-. Accordingly, he has duly complied with his statement wherein he had surrendered an amount of ₹ 40 lakhs. Further, the said surrender was a composite amount for 2 years. For the A.Y. 2005-06, I have held (in the appellate order) that out of ₹ 40 Lakhs, (surrendered amount), a sum of ₹ 8,96,686/- would be considered for the AY. 2005-06 and the balance ₹ 31,03,314/- would be considered for the A.Y. 2006-07. The income returned by the assessee for this asstt. year at ₹ 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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