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TMI Blog2016 (6) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... at he has quantified all the details and prayed for one more opportunity to substantiate his case before the A.O. By considering the request made by the assessee and also keeping in view of the facts and circumstances of the case, we are of the opinion that in the interest of justice, one more opportunity should be given to the assessee. In view of the above, we set aside the order passed by the Ld. Commissioner and remit the matter back to the A.O., in respect of opening balance as well as source of initial purchases made by the assessee of ₹ 3,28,351/- and direct the A.O. to decide the issue de-novo in accordance with law after being given an opportunity of being heard to the assessee. Unexplained expenditure - Held that:- A.O. has not satisfied with the explanation given by the assessee on the ground that the assessees are not able to substantiate the stand taken by them and additions were made. CIT(A) confirmed the same. After hearing both the sides by considering the request of the Ld. Counsel for the assessee, we are of the opinion that one more opportunity should be given to the assessee in the interest of justice. Accordingly, we set aside the order passed by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore he has estimated the profit at 20% on stock put for sale. Assessee carried matter in appeal before the CIT(A) and submitted that the estimation made by the A.O. is arbitrary and very higher side and submitted that the profit shown by the assessee may be accepted. The Ld. CIT(A) after considering the explanations of the assessee, he has restricted estimation made by the A.O. at 10% on purchase price and directed the A.O. to re-compute the income at 10% of the purchase price. On being aggrieved, assessee carried the matter in appeal before the Tribunal. 4. The Ld. Counsel for the assessee has submitted that the assessee is in the business of Indian made foreign liquor (IMFL) sale and under similar facts and circumstances, the coordinate bench of the Visakhapatnam Tribunal has considered the issue and held that net profit at 5% of the purchase or stock put for sale has to be considered as the profit in this line of business and submitted that the same may be followed and applied in the assessee s case. 5. On the other hand, the Ld. D.R. has strongly supported the order passed by the authorities. 6. We have heard both the parties, perused the materials available on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is not applicable to the facts of the present case. The case before the Hon ble A.P. High Court was that the assessee is into the business of trading in arrack, whereas it is in the business of dealing in IMFL. The assessee further contended that IMFL trade was controlled by the State Government through A.P. State Beverages Corporation Ltd. and the prices of the products are fixed by the State Government. The assessee being a license holder of State Government cannot sell the products over and above the MRP fixed by the State Government. We find force in the arguments of the assessee for the reason that the A.O. has estimated the net profit by relying upon the decision of A.P. High Court in the case of CIT Vs. R. Narayana Rao in ITA No.3 of 2003 which is rendered under different facts. The A.P. High Court has considered the case of an arrack dealer, whereas, the assessee is into the business of dealing in IMFL. Therefore, we are of the view that the A.O. was not justified in relying upon the judgement, which was rendered under different facts to estimate the net profit. On the other hand, the Ld. A.R. for the assessee, relied upon the decision of ITAT, Visakhapatnam bench in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e set aside the order passed by the Ld. Commissioner and we direct the A.O. to restrict the estimation at 5% on total purchases net of all deductions. 8. This ground of appeal raised by the assessee is allowed for statistical purposes. 9. So far as other appeals in respect of estimation of profit is concerned, in view of our decision above, we set aside the order passed by the Ld. CIT(A) and remit the matter back to the A.O. to restrict the estimation at 5% on total purchases net of all deductions. 10. This ground of appeal raised in all the appeals is allowed for statistical purposes. 11. So far as another ground raised by the assessee in respect of opening capital and unexplained expenditure are concerned, in the assessment order, the A.O. has noted that the assessee has shown opening capital balance at ₹ 10,15,000/-. The assessee has asked the source of the above amount. It was submitted before the A.O. that though assessee has not filed any return of income for the earlier years for the reason that his income has been below the taxable limit and submitted that he has been earning income since 20 years and his earnings are being accumulated every year. The accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other hand, the Ld. D.R. strongly supported the order passed by the authorities. 15. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The case of the A.O. is that the assessee has introduced a capital of ₹ 10,15,000/- and he has failed to explain the source of above amount, no details are filed and he is unable to discharge the burden cast upon him and therefore the entire amount has to be treated as unexplained credit to the capital account and the same was brought to tax under the head income from other sources . The case of the assessee is that in the past 20 years, he has been carrying out various small businesses and he is able to save some money, he has not filed any returns, because his earnings are below taxable limit. Out of the savings, the assessee introduced the capital. The assessee is not able to substantiate his case neither before the A.O. nor before the CIT(A). Now before us, he has submitted that he has quantified all the details and prayed for one more opportunity to substantiate his case before the A.O. By considering the request made by the assessee and also keeping in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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