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TMI Blog2016 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.5% on wholesale business as adopted by the AO in the previous AY 2009-10. With regard to retail business, assessee offered 3% in the AY 2009-10 and AO made some disallowance. But in the current AY 2011-12, assessee had offered only 2%. In line with the income determined in AY 2009-10, we are inclined to direct AO to assess the income of the assessee @ 3.5% of the total turnover i.e. both retail and wholesale turnover. Undisclosed income u/s 69A - Held that:- As submitted by the assessee that the sales of the wholesale business were deposited in personal savings bank. Assessee had prepared self-made vouchers to prove the sales made. As can be seen from the bank statement submitted by the assessee, the cash deposits are in small denominations ranging from ₹ 2000/- to ₹ 25000/-. Revenue has not brought any material/evidence on record contrary to the submissions of assessee to prove that the assessee had other source of income. Therefore, we are inclined to accept the contention of the assessee that these cash deposits were made out of the wholesale business. Moreover, the Hon’ble Jurisdictional High Court in the case of Maddi Sudarshnam Oil Mills Co.[1959 (2) TMI 27 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by him in the bank account out of the sale proceeds of wholesale business to the tune of ₹ 64,46,043/-, for which no books of account were maintained and audited. Secondly, the assessee himself has admitted in his letter that no books of account were maintained in respect of the turnover of ₹ 64,46,043/- and the vouchers are also self-made vouchers. Even the books of account produced in respect of the turnover of ₹ 2,90,60,566/- are not complete. As the turnover of the assessee exceeds ₹ 40 lakhs, he has to get his accounts in respect of the total turnover i.e. ₹ 3,55,06,609/- (Rs.2,90,60,566 + ₹ 64,46,043) audited by an accountant before the specified date and furnish a report of such audit as per the provisions of Section 44AB of the Income Tax Act, 1961. However, the assessee has failed to maintain complete books of accounts and get his accounts audited. In view of the above facts, the assessee has failed to maintain the complete books of account as required under the provisions of the Income Tax Act. Hence, I am not satisfied about the correctness and completeness of the books of accounts maintained by the assessee and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of en tire turnover. 6. Revenue has raised the following grounds of appeal. 1. Ld.C1T(A) erred on both law and facts of the case. 2. Ld.CIT(A) erred in deleting the addition of ₹ 47,09,460/- made u/s 69A of the Act, without considering the fact that the assessee could not explain the sources , for the same. 3. Ld.CIT(A) erred in deleting the addition made u/s 69A of ₹ 47,09,460/- without considering the fact that the assessee could not furnish the particulars of deposits stated to have been made by various purchasers from different places, and also wrongly concluding that the said deposits are a part of unaccounted turnover of the assessee. 4. Ld.C1T(A) erred in restricting the estimation of income to 5% from 10% estimated by assessing officer, without bringing any comparable cases on record. 7. Ld. AR submitted that assessee is in the business of trading of lubricant oils, made sale of ₹ 2,90,60,566/-. Proper books were maintained during this AY and audited as per the provisions of section 44AB. In addition to this, assessee also made sale of loose burnt oil to the extent of ₹ 64,46,043/-. It is submitted that pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturers and selling it in organised sector by maintaining proper books of account. It was audited only to the extent of retail business. Where as in the wholesale business, he had not maintained any books of account, and all the vouchers relating to purchase and sales were self-made. There is no dispute with regard to the turnover. AO and CIT(A) rejected the books of both the businesses and preferred to estimate the income. Ld. AR submitted before us clearly that the retail business was audited by a Chartered Accountant as per the provisions of section 44AB. The issue before us is relating to wholesale business, which was not audited and only self-made vouchers are available. Since there is no change in the nature of business from AY 2009-10 to the current AY, we do not find any reason to adopt the rate of 3.5% on wholesale business as adopted by the AO in the previous AY 2009-10. With regard to retail business, assessee offered 3% in the AY 2009-10 and AO made some disallowance. But in the current AY 2011-12, assessee had offered only 2%. In line with the income determined in AY 2009-10, we are inclined to direct AO to assess the income of the assessee @ 3.5% of the total t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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