9911796707
TMI Blog2019 (12) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... It is well established principle of business of accounting that if the assessee s income of the assessee has been shown or estimated u/s.44AF then the assessee is not required to maintain any books of account and no further addition or disallowance is called for regarding his trading expenditure or any other account. Therefore, the addition made on the basis of closing stock found during the survey cannot be held as sustainable. I may point out that even if the authorities below want to tinker the point of closing stock found during the survey, then they are also required to consider the opening stock of the assessee at the beginning of the financial year i.e. on 1.4.2009 otherwise, addition on account of closing stock cannot be made in the hands of the assessee especially when the assessee herself is showing higher percentage of net profit on the turnover undertaken during the relevant financial period. Accordingly, Ground No.B is allowed. Unexplained investment - appellant could not produce any evidence before the CIT(A) to justified the source of such income - assessee is legal heir of parents and got all the movable and immovable property after their demise - HELD THAT:- A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, addition on account of closing stock cannot be made in the hands of the assessee without considering the opening stock and without any show cause notice to the assessee by the AO. 5. Replying to above, ld DR strongly relied on the order of the AO as well as ld CIT(A) and submitted that during the course of survey, stock of ₹ 5,02,307/- and silvery jewellery was found with the assessee. Therefore, this addition has been made and confirmed. 6. On careful consideration of the rival submissions, first of all, I may point out that section 44AF of the Act is a special provision for computing the profits and gains of retail business, which provides that in case of an assessee engaged in retail trading in any goods or merchandise, a sum equal to five per cent of the total turnover in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum as declared by the assessee in his return of income shall be deemed to be the profits and gains of such business chargeable to tax under the head profits and gains of business or profession . This provision applies only to the assessee whose turnover is less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... net profit on the turnover undertaken during the relevant financial period. Accordingly, Ground No.B is allowed. 8. Ground No.C reads as under: For that the ld CIT(A) has erred in confirming the addition on account of unexplained investment to the tune of ₹ 17,76,662/- on the flimsy ground that the appellant could not produce any evidence before the CIT(A) to justified the source of such income, when the appellant in the written submission had in fact deliberated in detail regarding the source of the same. 9. Ld counsel for the assessee submitted that the Assessing Officer has made addition of ₹ 17,76,662/- on account of unexplained investment without any justified reason and sustainable basis. Ld counsel vehemently pointed out that the appellant has invested the impugned amount out of her own source of funds which were generated over a period of 15 years. Ld counsel drawing my attention towards written submission of the assessee submitted that the assessee is consistently filing the return of income from assessment year 1996-97, wherein, the assessee has shown income of more than ₹ 26 lakhs d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Replying to above, ld DR supported the orders of lower authorities and submitted that the assessee has not properly explained the source of investment. Therefore, the addition on account of unexplained investment may kindly be confirmed. 13. On careful consideration of the rival submissions, first of all, I find it appropriate to note down some uncontroverted and undisputed facts, which are as under: i) The assessee is filing return of income since 1996-97 till present assessment year 2010-2011 and has shown returned income of ₹ 26,28,943/-. ii) The assessee is only child of her parents and due to old age they used to stay with the assessee till their last time of life. iii) The mother of the assessee Late Annapurna Mohanty died on 19.11.2009 during the financial period 2009-10 relevant to assessment year 2010-2011 and her father also died on 21.1.2014. iv) Legal heir certificate shows that the assessee is the only legal heir of her parents and obviously in the natural course of practice all movable and immovable property has to be divulged in the hands of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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