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TMI Blog2019 (7) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded receipts as worked out by the AO at 2,57,41,751/- were considered the net profit rate on undeclared receipts comes to 19.42% which is much above the average of last 5 years and is reasonable considering the decreasing trend. As already held that the actual profits and not the entire suppressed receipts are to be added. The profits declared on suppressed receipts (extrapolated for the whole year) at 50 lac are held reasonable and therefore, any further addition is uncalled for. - Decided against revenue X X X X Extracts X X X X X X X X Extracts X X X X ..... om time to time./ Sub-clause 3 provides a situation, that is, if the Assessing Officer is unable to deduce the true income. On the basis of method of accountancy followed by an Assessee than he can reject the book result and the assessee's income according to his estimation or according to his best judgment. The Assessing Officer in that case is required to point out the defects in the accounts of Assessee and required to seek explanation of the Assessee qua those defects. If the assessee failed to explain the defects than on the basis of the book result, income cannot be determined and Assessing Officer would compute the income according to his estimation keeping in view the guiding factor for estimating such income. 8. In the light of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "7. Having gone through the nature of seized documents, the final accounts, the assessment orders, the submissions and the decided law; the following pertinent observations and decisions are culled out; a) The comparison of the transactions recorded on the registers etc. seized with the books of account and bills, clearly shows that the actual receipts are substantially more than that recorded in the regular books; b) The total receipts worked by the AO are also disputed, and the appellant did not agree with the figures worked out. I have carefully gone through the seized register and the regular books. The following facts and observations are very relevant to the issue : 1) the receipts in the regular books are taken into dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and therefore the accounts are not correct and complete. Therefore, these are liable to rejected 145(3) and the assessment is to be made to the best of judgment applying provision of section 144. The extrapolation to complete year where record of last six months has been found and seized is fully justified. It cannot be said that suddenly the whole system was devised in the middle of the year. Reliance is placed on the decision of Hon'ble Andhra Pradesh High court in the case of Rajnik & Co. 251 ITR 0561 and Hon'ble Supreme Court in the case of K.Y. Pillash & Sons 63 ITR 411. However, the total unaccounted receipts would have to be worked out subtracting the corresponding recorded receipt as discussed in points (i) and (ii) above. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al receipts of the business and therefore, the suppression of profits which have been done by the appellant in the relevant previous year. I have worked out the net profit on total receipts, for A.Y. 2009-10 to 2013-14, excluding the following fixed or fully disclosed expenses like interest, depreciation, electricity bills etc.:- 1) Rent 2) Insurance Charges 3) Electricity expense 4) Municipal and Professional tax 5) Financial charges & Vehicle loan and House loan interest expenses 6) Depreciation as per Income Tax Act 7) Telephone bill (Landline) Therefore, the net profits for different years considering only the variable expenses is worked out as under : Direct income A.Y. 2013-14 A.Y. 2012-13 A.Y. 2011-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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