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TMI Blog2017 (6) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of profit shown by assessee in the earlier years cannot be set aside while determining the income on the basis of best judgment. Therefore after considering the trend of the assessee’s business we direct the AO to re-compute the profit @. 80% of the turnover. This ground of assessee’s appeal is partly allowed. Addition on account of difference between the creditors shown by assessee vis-à-vis shown by the respective parties - Held that:- Though the assessee has filed the re-conciliation the difference by stating that certain bills were raised at the fag-end of the year which was accounted for in the subsequent year. In such situation, if the differences are added to the total income of assessee then this will lead to double taxat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) erred in estimating the profit @ 1.5% of the total turnover. 4. The facts in brief are that assessee is a Hindu Undivided Family and is engaged in wholesale business of cloth. The Assessing Officer during the course of assessment proceedings requested the assessee to furnish the details in respect of several items shown in his financial statement. But the assessee failed to furnish the same and therefore AO disallowed the same as detailed hereunder:- i) Sundry creditors for goods 4860626 ii) Advance from the customers of ₹58,980/- iii) Various expenses of ₹4,52,992/- iv) Expenses in relation to exempt income of ₹91,893/- v) Interest expenses of ₹5,55,579/- Thus, the Assessing Officer disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit 2005-06 146394572 2.36% 0.26% 2006-07 148870624 2.56% 0.35% 2007-08 123418019 2.65% 0.44% 2008-09 117814321 2.80% 0.45% As correctness and completeness of accounts is unknown pitching estimation closed to the disclosed rate of income in the preceding AY is not fair. Discrepancies were noted by Assessing Officer in regard to customer balance, expenditure details incompleteness etc. if income is pitched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to whom interest is credited and from whom appellant has not obtained Form 15G. the forwarding of such Form 15G to CIT is not material to the decision taking cue from the decision in ITO, Ward-2(3), Kolkata vs. M/s Link Consultants Pvt. Ltd. of ITAT A Bench, Kolkata dated 29.11.2011. the Assessing Officer is directed to make verification of record i.e. whether Form 15G received in time in this regard and if received, not to effect any addition. 15. It is clarified that deduction under section 80C as allowed in assessment is to granted on income compute din manner specified in paragraph 12 and 14. 16. The decision in paragraph 12 disposes of grounds 2a, 2b, 3, 4, 5, 6 and 7 of appeal. The decision in paragraph 14 disposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1767214/- e.g. more than 4.2 times of disclosed income at ₹ 429331/- (before deduction u/s 80C) can never be called best judgment assessment either in law or on past assessments. 6) For that, without prejudice to above, in the facts and circumstances of the case, the ld. Commissioner of Income Tax (Appeals) ought to have adjudicated the grounds of appeal adduced before him in favour of the appellant that there is plausible explanations for alleged discrepancies pointed out in the assessment order by the assessing officer. The Revenue has raised per its ground as under:- 1. That, Ld. CIT(A), Asansol has erred in law and on facts by allowing the relief of ₹ 60,20,070/- disallowances made by the AO on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of Ld. AR we find that income declared in the earlier year is quite less than 1.5% and same was also accepted by Revenue. Considering the facts and totality we are of the view that the income on estimated basis should be. 80% to the gross turnover of the assessee. It is because the amount of profit shown by assessee in the earlier years cannot be set aside while determining the income on the basis of best judgment. Therefore after considering the trend of the assessee s business we direct the AO to re-compute the profit @. 80% of the turnover. This ground of assessee s appeal is partly allowed. 7.1 Now coming to the Revenue s appeal. We find that the AO has made the addition on account of difference between the creditors shown by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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