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TMI Blog2018 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... hould be based on past history of the assessee or the profit earned by assessee in similar line of business, whereas in the present case, though the AO referred to profits shown in the immediately preceding year, these figures were disputed by the assessee stating that the AO had not considered net profit rate of assessment year 2004-05, considered only net profit of assessment year 2002-03 and 2003-04 - we remit this issue back to the file of the AO to adopt rate of profit based either on past history or by comparable profits of concerns in the similar line of business. - Decided partly in favour of assessee for statistical purposes. - ITA Nos. 837 and 875/Bang/2012 - - - Dated:- 23-3-2018 - Sunil Kumar Yadav, Member (J) And Inturi Rama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has failed to furnish details in support of this. 3. Being aggrieved, an appeal was preferred before the ld. CIT(A), who vide impugned order, while upholding the estimation of profit on turnover, however, had directed the AO to estimate profit at 8% as against 12% adopted by the AO and also directed the AO to allow short term capital loss of ₹ 17,54,660/- after considering statements of account issued by the Portfolio Manager. 4. Being aggrieved, the assessee is in appeal before us in ITA No. 837/Bang/2012 and the revenue is in appeal before us in ITA No. 875/Bang/2012. 5. Now, we shall take up the assessee's appeal in ITA No. 837/Bang/2012. The assessee raised the following grounds of appeal: 1.1 The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Appellant. 3.2 The directions are not in accordance with provisions of the Act and the principles emerging from judicial precedents. Accordingly, the learned CIT(A) erred in issuing directions to the learned AO to adopt a notional profit of 8% of gross sales. 3.3 The learned CIT(A) has erred in issuing directions to the learned AO to adopt a notional profit, without considering that when true profits can be ascertained without much trouble, with reference to the books of accounts, estimation of profits on a notional/presumptive basis should not be made. 3.4 The learned CIT(A) ought to have appreciated that in absence of any specific defect or discrepancy found in books of accounts, the proprietorship concerns incurring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial levy of interest under Section 234B of the Act is ought to be deleted. The Appellant submits that each of the above grounds is independent and without prejudice to one another. Further, the Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before, or at the time of, hearing of the appeal. 6. Learned counsel for the assessee vehemently contended that the ld. CIT(A) was not justified in estimating profits without pointing out defects in the accounts maintained by the assessee. It was further contended that low gross profit cannot be a reason to reject books of account and in support of this, he placed reliance on the decision of the Hon'ble Madras High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held the estimate of profit. However, the ld. CIT(A) directed the AO to apply profit of 8% as against 12% adopted by the AO. Before us, learned counsel for the assessee had taken us to page No. 507 of the paper book wherein cancellation of VAT registration of 5 companies to show that those concerns were actually in existence. In our considered opinion, existence or otherwise of proprietary concern is of no relevance as the AO has considered total turnover of 5 concerns. This issue has no bearing on rejection of books of account. But we find that the assessee has not discharged the onus of proving genuineness of commission payment which can be valid reason to reject book results and resort to estimation of profit. But the AO cannot indulge i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of exchange rate fluctuation without verification, while, in fact, the assessee had credited an amount of ₹ 73,84,152 to the audited P L account representing gain on exchange fluctuation. 4. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored. 5. The appellant craves leave to add, alter, amend and/or delete any of the grounds mentioned above. 9. The only effective grievance of the revenue is that the ld. CIT(A) was not justified in directing the AO to adopt net profit rate of 8%. In the assessee's appeal, since we remanded the issue back t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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