9911796707
TMI Blog2013 (1) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant against the order of the income tax offer had erred in by estimating the Appellant profit from business profession at 8%. Reasons assigned by him doing the same are wrong and insufficient, regards being had to the facts and the circumstances of the case, the said estimation is on the higher side. 2. The learned CIT Appeal had erred in by confirming the addition of unsecured Loans at ₹ 19,607/-. Reasons assigned by him for doing the same are wrong and insufficient, regards being had to the facts and circumstances of the case, the said addition are not to have unconfirmed. 3. We have heard the learned counsel for the assessee as well as the learned D.R. and carefully perused the record. Facts necessary for disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. Under these circumstances the AO called upon the assessee to furnish proper evidence and despite number of opportunities the assessee has not furnished the details. The AO proceeded to reject the book results and estimated the profit. He observed, in para 4.3, that the assessee has shown receipts of commission from sale of milk at ₹ 6.94 lakhs. Since there is vast variation in the profit ratio, the expression commission is taken as commission on sales and, in view of the fact that the assessee has declared profit of 28.13% (including commission on sales), the AO estimated the profit at 15% of the total sales of ₹ 1.52 crores. It could thus be seen that though the total sales initially declared was only ₹ 37,14,387/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion towards expenditure to arrive at the net profit. 6. The learned CIT(A) observed that the assessee having filed four different sets of final accounts giving four different versions of his taxable/ business income, rejection of book results is justified. Even otherwise the assessee has not furnished supporting bills/invoices in respect of the expenses claimed therein. At the same time he noticed that the estimate of net profit at 15%, as adopted by the AO, is also without any basis. Having regard to the peculiar circumstances of the case the learned CIT(A) proceeded to rely upon the past years results to estimate the profit. In respect of A.Y. 2005-06 and 2006-07 the assessee has declared net profit ratio of 8%. He has also taken into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also submitted that the maximum of the turnovers declared by the assessee was taken into account by the AO and hence there is no dispute with regard to turnover. The AO could have given some reasons to estimate the turnover, which was not done in the instant case. The turnover having been accepted by the AO as well as the CIT(A), the margin which was permitted as per the circular cannot vary and hence the estimation of profit at 8% is excessive. 8. On the other hand, the learned D.R. strongly submitted that the assessee has given different versions at different points of time which prompted the AO to reject the books of account and to estimate the profit. It was also submitted that in the immediately preceding year the assessee declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his year. Having regard to the overall circumstances of the case we estimate the profit at 5% of ₹ 1,52,36,179/- as against 8% upheld by the learned CIT(A). Ground No. 1 is therefore partly allowed. 10. Apropos ground No. 2 the facts of the case are that the assessee has shown unsecured loan of ₹ 19,607/- stated to have been taken from his friend, Shri Kamalkant Hirve. Since the amount is below ₹ 20,000/- confirmation letter was not furnished. In the absence of proof of identify, genuineness and creditworthiness of Shri Kamalkant Hrive the AO added the same under section 68 of the Act and the learned CIT(A) confirmed the action of the AO. 11. Even before us no material was furnished to prove the identity of the credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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