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TMI Blog2017 (8) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... tre. Based on material available on record, we find the approach of the ld CIT(A) as reasonable as he has followed the assessee’s past history and instead of disallowing individual expenses, has compared the net profit of the last year will the net profit declared by the assessee and he has estimated net profit at 10% as against 7.34% last year, thus taking into account low operating cost in relation to letting of theatre. In the result, grounds of the Revenue are dismissed. - ITA No. 570/JP/2014 - - - Dated:- 7-7-2017 - SHRI KUL BHARAT, JM AND SHRI VIKRAM SINGH YADAV, AM For The Revenue : Shri S. L. Chandel (Addl. CIT) For The Assessee : Shri S.L. Poddar (Advocate) ORDER PER:SHRI VIKRAM SINGH YADAV, A. M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of account, it is not verifiable that receipts expenditure shown by the assessee are correct true. Thus in the case given, in the absence of primary records books of account, trading results shown by the assessee are not verifiable, hence cannot be taken and accepted as authentic. In these circumstances, only way or recourse left is to estimate the income of the assessee keeping in view of the past history of the assessee which is best guide for estimation of income as has been held by various courts. 3. The AO further observed that on perusal of profit loss account it was observed that assessee has shown receipts of ₹ 45,11,355/- and ₹ 40,663/- from sales of theatre tickets from sale in food planet respectivel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, claim of the assessee regarding increased expenses cannot be acceptable logically. The same can also not be accepted as assessee could not furnish any documentary evidence in support of its claim of expenditure. Further, regarding expenditure claimed by the assessee, onus is on the assessee to prove their genuineness verifiability of the same is to be examined in the light of various provision of the IT Act 1961. The above discussion clearly shows that the assessee has not been able to provide any satisfactory basis or records for the expenditure claimed by it does not fulfil the criteria as laid down by the Act.Therefore, claim of expenditure made by the assessee cannot be accepted. In view of the facts circumstances as mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under consideration is essentially the same as was in the immediately preceding year. The difference is that after about four months, the theatre and canteen was let out and the appellant was enjoying income from lease rent. Thus, the method of business has changed but the nature of the business i.e., running of theatre and restaurant is the same. There is no apparent reason as to why the profit should suddenly go down from ₹ 19,56,0000/- to loss of ₹ 27,17,342/-, Since the books of account and supporting vouchers are not available which according to the appellant has been lost due to accident of the accountant, the best method available to determine the income is to estimate the income on the basis of the results of the immed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which theatre and food plaza was run by the assessee based on past year turnover and further, has disallowed 50% of the expenses on account of non-verifiability and holding that letting out of theatre is much less expenditure oriented than running of theatre on its own. The ld CIT(A) has appreciated the AO s concern that books of accounts are not available and also the fact that there is no apparent reason that profit will suddenly go down from ₹ 19,56,000 to loss of ₹ 27,17,342. He further observed that the nature of business remains essentially the same although method of doing the business has changed. He accordingly compared the net profit for the last year and applied N.P rate of 10% on the total turnover. It is not the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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