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TMI Blog2017 (8) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of the confirmations before the A.O. and the CIT(A), accordingly, the petition for admission of additional evidence is rejected. The assessee has not even furnished the names and addresses of the persons from whom advances were taken at the time of assessment proceedings as well as the CIT(A) and failed to establish identity, creditworthiness and the genuineness of the creditors. Therefore, the CIT(A) has rightly confirmed the addition made by the A.O. and the same is upheld. Unexplained investment - Held that:- Though assessee claimed to have received the amounts from Shri Krishna Rao and Shri Krishna Murthy, the assessee has not even furnished the confirmation letters, addresses of the persons, PAN numbers and his creditworthiness of the creditors. Even at the time of appeal hearing, the assessee did not furnish any such details. Therefore, we do not find any infirmity in the order. The Ld. CIT(A) and the same is upheld. - I.T.A.No.41/Vizag/2015 - - - Dated:- 26-7-2017 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N. Hari, AR For The Respondent : Shri M.K. Sethi, DR ORDER PER D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee that the net profit estimated by the A.O. is quite high when compared to the nature of business carried on by the assessee. It is further submitted that the case law relied upon by the assessee 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 rely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bench. Therefore, we direct the A.O. to estimate the net profit of 5% on total purchases net of all deductions. Ordered accordingly. 8. We respectfully following the above order of the coordinate bench of the Tribunal, we set aside the order passed by the Ld. CIT(A) and direct the A.O. to estimate the profit from the business of the assessee by applying the rate of 5% of the purchases made net of all other deductions. 9. Ground nos.5 6 are related to the unexplained investment of ₹ 32,31,704/-. During the assessment proceedings, the assessing officer found on the opening day of business, the assessee made the investment of ₹ 58,68,804/- and explained the source to the extent of ₹ 26,36,900/- and the balance amount of ₹ 32,31,704/- was not explained. Though the assessee explained that source was from the advances received from the prospective customers ranging from ₹ 2,000/- to ₹ 2,500/- from each person, the assessee did not furnish even the names of the persons from whom the advances were received. Therefore, the assessing officer made the addition of ₹ 32,37,704/-. Aggrieved by the order of the A.O., the assessee went on appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. A.R. explained that the assessee could not furnish confirmation letters before the CIT(A) due to the reasons beyond his control and neither intentional nor deliberate. We have gone through the reasons in the petition for admission of additional evidences and the confirmations filed by assessee to support the source of unexplained investment. All the advances were taken from the parties residing in the nearby villages and near and dear. All the loans were supposed to be taken in cash. The Ld. A.R. could not explain the reasons for non-submission of confirmations before the assessing officer as well as the CIT(A), when the loans were taken from the creditors residing in nearby villages. The reason of the assessee that the confirmations could not be obtained due to the circumstances beyond the control is not acceptable and appears to be after thought. The time limit for completion of the assessment was 2 years from the end of the relevant assessment year and the assessee must submit the evidences within the time limit to support the claim. In this case, both the A.O. and the CIT(A) have given sufficient opportunities but the assessee failed to furnish the confirmations before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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