9911796707
TMI Blog2016 (4) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit of withdrawals and its normal human behavior that no prudent person will withdraw the money and re-deposit into banks without any justified reasons. In view of the circumstances of unverified purchases, cash sales and expenses of the business activity etc, we don’t find any justification in submissions of the assessee in this regard, and in our opinion , the CIT(A) has rightly held entire cash deposits as business receipts of the assessee. - Decided against assessee N.P. percentage selection - Held that:- We agree with the contention of the ld. AR that when the AO has already rejected the sales figure of the assessee declared in the original letter as being on estimate and without any evidence, there is no justification on the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO of application of profit rate of 20% which is in contravention to the provisions of section 44AD. 2) Agreeing with the AO on total estimated turnover of ₹ 36,05,497/- based on bank deposits whereas these deposits included the amount withdrawn and then again deposited. 3) Ignoring the amount of ₹ 14,47,345/- withdrawn and then redeposited and has erred in adopting the total deposit in the bank at ₹ 36,05,497/- which is incorrect and wrong since these included the amount withdrawn. 4) In not adopting the profit rate as per the provision of section 44AD and applying 20% arbitrarily which is against law. 5) In treating the amount of ₹ 36,05,497/- as turnover. 6) In not adopting the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee further explained that cash deposits of ₹ 19,03,150/- stood explained by the cash sales and the balance deposits were made out of the withdrawals from the banks on various dates. Further, the Assessing Officer noticed that out of purchase parties shown in re-casted trading account, only one party M/s. S.K.International could be verified and in respect of other parties, the assessee even could not produce purchase bills etc. The Assessing Officer also could not verify the other parties through notices issued u/s 133(6) of the Act. The Assessing Officer did not accept the submission of the assessee that cash sales were only of ₹ 19,03,152/- . According to him, the entire deposit of ₹ 36,05,497/- in the bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s CIT reported in 72 ITR 612. Further he submitted that the case of the assessee was of no books of accounts and the return was filed u/s 44AD of the Act, the profit rate of 8% should have been applied in place of profit rate of 20% applied by the AO. The ld AR further submitted that the CIT(A) has not given any comparable case where profit rate of 20% in retail business exists. 4.2 The ld. Senior Departmental Representative ( Sr DR) on the other hand, relied on the order of lower authorities and submitted that in absence of any proof or evidences in the hands of the assessee that money withdrawn was redeposited in bank accounts, the sales of the assessee cannot be limited to ₹ 19,93,152/- . She further submitted that it was the on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cited by the assessee is not applicable over the facts of the case as the assessee himself has failed to support its claim of re-deposit of withdrawals and its normal human behavior that no prudent person will withdraw the money and re-deposit into banks without any justified reasons. In view of the circumstances of unverified purchases, cash sales and expenses of the business activity etc, we don t find any justification in submissions of the assessee in this regard, and in our opinion , the CIT(A) has rightly held entire cash deposits as business receipts of the assessee. The findings of the CIT(A) on the issue of sales receipt are well-reasoned and there is no infirmity in the said findings. Accordingly, we dismiss the grounds No. 2,3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected the sales figure of the assessee declared in the original letter as being on estimate and without any evidence, there is no justification on the part of the Assessing Officer to adopt the net profit rate of 20 percent. shown on the basis of estimate and without any evidences. Further neither the Assessing Officer nor the ld. CIT(A) has brought on record any comparable case having 20 percent net profit rate in the retail business similar to the business carried on by the assessee. In such circumstances, we are of the opinion that the adopting the net profit rate of the eight percent. is most appropriate , which has been provided under section 44AD of Act for retail business having business turnover not exceeding ₹ 60 lacs. As ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
