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TMI Blog2019 (5) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... finding of CIT(A) calculating net profit rate 2.16% being average of net profit rate declared by assessee for 5 years at 2.77%, 1.33%, 1.54%, 1.77% and 3.5% thereby deleting the addition of ₹ 60,57,651/- Rejection of claim u/s 54B - no evidence placed in support to seek claim - HELD THAT:- The assessee sold land and received sale consideration of ₹ 14,32,000/- thereon. Cost of acquisition of the land and transfer expenses were shown at ₹ 8,14,555/-. The short term capital gain is arising at ₹ 6,17,445/-. The assessee made a claim of exemption u/s 54B of the Act at ₹ 6,17,445/- but no evidence placed in support thereof before both the lower authorities. Even during the course of hearing before the Tribunal assessee has not made any submissions with regard to claim of deduction u/s 54B of the Act at ₹ 6,17,445/-. There seems no reason to interfere in the finding of Ld. CIT(A) confirming the addition. - Decided against assessee. Unexplained unsecured loan u/s 68 - HELD THAT:- During the course of hearing before the Tribunal no other evidences have been put forth by the assessee in order to prove identity, creditworthiness and genuineness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, ITA No.262/Ind/2017, ITA No. 253/Ind/2017 - - - Dated:- 8-5-2019 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the Appellant : Shri C.P. Rawka VeenasRawka, CAs For the Revenue : Shri K.G. Goyal, Sr. DR ORDER PER MANISH BORAD, A.M: The above captioned cross appeals are directed against the order of Ld. Commissioner of Income Tax(Appeals)-I Indore, (in short CIT(A) ), dated 28.10.2016, 23.12.2016 28.10.2016 which is arising out of the order u/s 143(3) 271(1)(c)of the Income Tax Act 1961(hereinafter called as the Act ) framed on 23.03.2015, 16.03.2015 28.09.2015 by ACIT,3(1) Indore. 2. As the issues raised in these bunch of appeals relates to same assessee and are common in nature, therefore, these were heard together and are being disposed off by this common order for the sake of convenience and brevity. 3. Brief facts of the case are that the assessee is an individual and engaged in the business of liquor contractor. Regular return of income was filed for A.Ys. 2012-13 2013-14 which were selected for scrutiny assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case Ld. CIT(A) has erred in not considering the statement of the assessee recorded on 19.03.2015 during the course of assessment proceedings in which in the reply of question no.6,7, 8 he has accepted net profit rate of 3.5% in view of defects in his books of accounts. 5. We have heard the rival contentions and perused the record placed before us. The first issue in challenge before us by both the parties relates to estimation of net profit wherein Ld. AO estimated net profit @ 3.5% against the net profit of 1.06% declared by the assessee. Ld. CIT(A) has restricted the addition applying net profit rate of 2.16% being the average of net profit rate of 5 years. 6. Ld. counsel for the assessee referring to the submission made before the lower authorities submitted that the books of accounts were regularly made and are being audited. Sale has increased due to which net profit rate decreased. 7. We find that during the course of appellate preceding the details of turnover of profit of the 3 years are shown in the following manner: Sr. No. Particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 11 Total Shops 9 17 15 8. From the perusal of the above table it is noteworthy that net profit rate declined drastically in A.Y. 2012-13. During A.Y. 2011-12 Net profit including commission of ₹ 51,59,409/- has been shown on the gross turnover of ₹ 18.62 crores but surprisingly during the A.Y. 2012-13 turnover has increased to₹ 45.20 crores and profits to ₹ 56,15,050/-. It shows that net profit of ₹ 4,55,641/- has only increased on the increased sales of ₹ 26.59 corers. The number of shops has also increased 17 from 9. In the Tax audited report quantitative details are not shown. No regular sale bills are issued. No plausible reasons have been given by the assessee for sharp decrease in the net profit rate. 9. In these given facts and in the light of Hon'ble Jurisdictional High Court in the case of ACIT vs. Gendalal Hazarila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 54B of the Act at ₹ 6,17,445/-. 13. In these given facts and circumstances of the case there seems no reason to interfere in the finding of Ld. CIT(A) confirming the addition. Ground no.3 raised by the assessee deserves to be dismissed. 14. As a result, Cross appeal for A.Y. 2012-13 stands dismissed. Now we take cross appeal for A.Y. 2013-14 15. We have heard the rival contentions and perused the record placed before us. The following grounds of appeal have been raised. ITANo.253/Ind/2017Assessee s appeal for A.Y. 2013-14 i. Whether on the fact and in the circumstances of the case ld. CIT(A) has erred in restricting the net profit rate at 2.16% as against net profit rate of 3.5% adopted by the AO. ii. Whether on the facts and in the circumstances of the case Ld. CIT(A) has erred in applying ratio on the decision of Hon'ble Rajasthan High court in the case of Trilok Chand Girdhariala Party vs. ITO-Ward-1, SawaiMadhopur in ITANo.577/2009 dated 21.01.2014 in appropriate manner as in that case Hon'ble High court has held to adopt average net profit rate whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the net profit in the case of assessee to be computed 2.16% of the total turnover. However, this finding as well as finding for A.Y. 2012-13 should not be taken as basis in the subsequent years and in case similar issue comes in future it should be decided on the basis of facts and figure for the year under appeal. In the result this common issue of estimation of net profit raised by both assessee and revenue stands dismissed. 19. Now we take ground No.3 of assessee s appeal for A.Y. 2013-14 for addition of unexplained unsecured loan u/s 68 of the Act at ₹ 47,77,000/-. 20. We have heard the rival contentions and perused the record placed before us. During the course of assessment proceeding Ld. AO observed that a sum of ₹ 47,77,000/- has been taken as unsecured loan from six different parties. Assessee was unable to furnish any evidence to establish the identity, creditworthiness and genuineness in respect of loan creditors. Addition was made u/s 68 of the Act by the Ld. AO. Thereafter before the ld. CIT(A) assessee could file confirmation of account but no other satisfactory evidence was filed due to which addition of ₹ 47,77,000/- m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of addition of ₹ 60,19,920/- made by the AO u/s 69 of the Act. 24. We have heard the rival contentions and perused the record placed before us. Ld. AO observed that the assessee has purchased a flat at Shehnai Residency of ₹ 60,19,920/- and called for the copy of purchases documents but the query remain unexplained. Thereafter before the Ld. CIT(A) assessee filed the details along with proof of taking house loan of ₹ 42,50,000/- for the purchase of flat. Ld. Departmental Representative (DR) failed to rebut the finding of the Ld. CIT(A). 25. We therefore, in the given facts and circumstances of the case, are of the view that the alleged purchase of flat of ₹ 60,19,200/- cannot be categorized under the unexplained investments u/s 69 of the Act as the same have been recorded in the regular books of accounts along with housing loan taken for financing the purchase of the flat. No interference is therefore, called for in the finding of the Ld. CIT(A) deleting the addition of ₹ 60,19,920/-. Accordingly, ground no.4 of Revenue s appeal stands dismissed. 26. Now we take up Assessee s appeal in ITAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h assessee and Revenue are in appeal raising in the ground relating to levying of penalty u/s 271(1)(c) of the Act at ₹ 33,50,000/-. Penalty u/s 271(1)(c) of the Act is leviable if the assessee conceal the particulars of income or furnishes inaccurate particulars of income. 34. In the instant appeal part of the penalty is levied on the estimated profits of ₹ 1,08,24,617/- made by the AO by applying net profit rate of 3.5% on the sales disclosed by the assessee. From going through the assessment order it is discernable that Ld. AO rejected the books u/s 145(3) of the Act for not maintaining quantitative records and sales vouchers. No doubt has been raised for the purchase made by the assessee from the Excise Department. It is well established fact that the assessee engaged in the Liquor contractor business have to prepare regular quantitative details to be furnished to the Excise Authority. 35. The regular stock is taken. No anomaly has been found in the audited books of account. Addition has been made only by estimating profits. No adverse finding has been given for any instances which could prove that assessee has concealed income or furni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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