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TMI Blog2016 (6) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the line of business in which assessee is engaged, that the determination of net profit @ 1% would cover up all the other deficiencies in the business of the assessee and we direct accordingly . All other additions made by the Learned AO would stand deleted once income is determined at 1% of turnover. Hence the grounds raised by the revenue are partly allowed. - I.T.A No.1393/Kol/2013 - - - Dated:- 1-6-2016 - Shri N. V. Vasudevan, JM Shri M. Balaganesh, AM For The Appellant: Smt. Ranu Biswas, JCIT, Sr. DR For The Respondent: Shri K. M. Roy, FCA ORDER Per Shri Balaganesh, AM: This appeal by revenue is arising out of order of CIT(A)-XXXIII, Kolkata vide Appeal No. 261/CIT(A)-XXXIII/ItO.Ward-52(3)/Kol/09-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dited by a qualified chartered accountant on 25.10.2007 for the Asst Year 2007-08 which would prove that the assessee should be having a copy of the impounded books. Accordingly, he proceeded to reject the trading and profit and loss account filed by the assessee u/s 145(3) of the Act. The Learned AO observed in the assessment order that purchase bills / invoices for July 2006 were furnished by the assessee. He observed that the rate of purchase was ₹ 7.257 per kg and as per sales summary, the rate of sale was ₹ 8.023 per kg. Considering the same, he concluded that the actual purchase for export sales of ₹ 13,56,91,267/- should be ₹ 12,27,36,074/- based on some workings and determined the net profit of the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that the undisclosed profit worked out by him is not based on any evidence regarding actual suppression. Though a survey action under section 133A had been carried out at the appellant's premises, there is no specific finding that either any purchase had been inflated or sale price was understated. What the assessing officer has done in that he has computed average sale price as per invoices for the month of July 2006 and average price as per bills for the same month. From this, he has arrived at a ratio of rate of purchase and rate of sale. This ratio has been applied by him to the entire sale for the year to arrive at the figure of purchase required for making the sale. Thus, the basic premise is that the ratio of rate of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has shown net profit rate of 0.60%. However, no scrutiny assessment was made in that year. Books of accounts have not been produced during the year under appeal for verification. Considering these facts, it would be, in my opinion, reasonable to arrive at net profit by applying net profit rate of 0.75%., which would come to ₹ 10,17,684/-. The assessing officer is directed to reduce the addition accordingly. 6. With regard to addition towards sundry creditors of ₹ 8,40,000/- is concerned, the Learned CITA held as under:- 6.2. I have carefully considered the facts of the case. Although it has been mentioned by the assessing officer that no details of sundry creditors had been produced, from the copies of submissions m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit percentage at 0.75% instead of 0.60% as shown by the assessee. 2.That on the facts and in circumstances of the case, the CIT(A) in having accepted the rejection of books u/s 145(3) erred in substituting his own estimation having no basis whatsoever with that of the A.O. which was based on intelligible criteria like, purchase sales rates, though for a short period . 3. That on the facts and in circumstances of the case, the CIT(A) failed to appreciate that the assessee had not maintained any quantitative details of Purchases sales as per his own Auditor's Report in Form 3CD dated 25/10/2007 and even failed to produce the purchase bills for verification. 4) That on the facts and in circumstances of the case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,40,000/- and difference in purchases. 9. We have heard the rival submissions and perused the materials available on record. We find that the assessee had not objected to the rejection of trading profit and loss account by the Learned AO u/s 145(3) of the Act. The assessee had not produced any books of accounts and supporting documents before the Learned AO. Under these circumstances, we find that net profit of the business had to be determined only on estimated basis. We find that the Learned CITA in the absence of past history of the assessee, had resorted to refer to subsequent year s net profit which was disclosed at 0.60% by the assessee. The Learned CITA had determined the net profit @ 0.75% . We find, in the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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