9911796707
TMI Blog2020 (9) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... e 'Act') dated 27/12/2017. 2. The grounds of appeal raised by the assessee are as follows: 1. For that the ld. CIT(A) was not justified in partially upholding the addition made by the Assessing Officer on estimated basis merely on the ground that the appellant assessee had failed to comply with requirements of law relating to audit and filing of returns, ignoring the fact that separate penalty was prescribed in the Act for the said failures. 2. For that the ld. CIT(A) was not justified in travelling beyond the assessment year under appeal and in issuing directions to the Assessing Officer to disturb the assessments relating to other years. 3. For that the appellant urges leave to raise any further/additional ground before or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat as per provisions of section 44ADof the Act, an assessee may claim lower profits and gains than the profits and gains specified in sub-section (1) of section 44AD of the Act, provided the assessee keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA of the Act and gets his accounts audited and furnishes a report of such audit as required u/s 44AB of the Act. Since, the turnover of the assessee was more than the prescribed limit for audit of one crore but not audited and assessee estimated the net profit lower than 8%, therefore, the assessee's estimation of income on the turnover was not accepted by assessing officer and assessee was asked to show cause that why the net prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses so claimed by the Appellant were not incurred by the Appellant for the purpose of its business, I find some merit in thecontention of the appellant. However, it is also correct that despite such huge turnover and huge cash deposits in his bank accounts, the appellant did not care to get his accounts audited under section 44AB of the Act. It is also noteworthy that the appellant did file his return of income only after a notice under section 148 of the Act was issued to him. Thus, it is clear that the appellant is having a non-compliant and blatant attitude towards the revenue. Therefore, while the case of the appellant merits some relief, at the same time entire relief cannot be permitted to the appellant. In my opinion the ends o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of section 44AD of the Act and completed the assessment by making estimation of income at the rate of 8% of turnover declared by the assessee. The Assessing Officer has made the presumption that the provisions of section 44AD of the Act is applicable to the assessee's case. We note that the assessee is an individual carrying on business of trading in hardware goods. He carries on business from a shop at Bangalmora in the name of Islam Hardware Store. He filed return of income for A.Y. 2014-15 in response to notice u/s 148 of the Act, declaring income of Rs. 2,54,970/-. The ld. Assessing Officer assessed the income at Rs. 17,88,797/- by applying the provisions of section 44AD of the Act and estimated business profits @ 8% of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -19 wherein the assessee has shown net profit @ 2.64%, 2.65% and 4% respectively. The comparative gross profit chart and net profit chart (for subsequent assessment years) submitted by the assessee is given below: Comparative Chart of Gross Profit Ratio and Net Profit Ratio FV Opening Stock Purchases Expense Sales Closing Stock Gross Profit Other Income Net Profit GP Ratio NP Ratio 2013-14 1,24,510 2,20,24,850 - 2,23,59,967 5,25,620 7,36,227 1,02,500 2,21,539 3.29% 0.99% Unable to provide the same presently since not available online. 2015-16 43,71,503 1,83,18,634 1,75,256 2,07,98,021 28,65,338 7,97,966 10,91,552 5,49,917 3.84% 2.64% 2016-17 28,65,338 1,88 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Registration No. 325204E) From the above comparative profit chart of subsequent years, we note that the average profit rate for subsequent assessment years 2016-17, 2017-18 and 2018-19 comes at 3.09% (2.64 +2.65+4.00/3). Normally, to estimate the profit of any assessee, the previous years` profit ratios are used and not the subsequent years` profit ratio. However, the subsequent years` profit ratios as submitted by the assessee provide us a bird eye and rough idea that what is the earning trend in the assessee`s business. 13. However, we note that assessing officer had not specifically identified any specific defects in the purported evidences and also taking note of the fact that the assessing officer has not held that the expenses so ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
