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TMI Blog2022 (9) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year is not justifiable by any stretch of imagination. Similarly the plea of the AR to adopt the Net Profit ratio of 16% based on the assessment order passed for the AY 2019-20 also could not be accepted because of the fact that the assessee himself has admitted a net profit ratio of 17.37% with respect to accounted and unaccounted income of the assessee for the AY 2016-17. We are of the considered view that the net profit ratio shall be computed at the rate of 18%, which is as accepted by the assessee during the survey proceedings. AO is directed accordingly. - I.T.A. Nos. 127, 128 & 129/Viz/2022 & S.A. Nos.02, 03 & 04 arising out of ITA Nos. 127, 128 & 129/Viz/2022 - - - Dated:- 21-7-2022 - SHRI DUVVURU RL REDDY , HON BLE JUDICIAL MEMBER And SHRI S BALAKRISHNAN , HON BLE ACCOUNTANT MEMBER Appellant by : Sri C. Subrahmanyam , CA Respondent by : Sri MN Murthy Naik , CIT - DR ORDER PER S. BALAKRISHNAN , Accountant Member : All the captioned appeals (ITA Nos.127, 128 129/Viz/2022) are filed by the assessee against the orders of the Ld. Commissioner of Income Tax (Appeals) [in short CIT(A)] in DIN Order No. ITBA/APL/S/250/2022-23/1043252458(1), ITBA/AP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the AO, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee s representative made required submissions with respect to the incomes accepted during the course of survey for the AY 2016-17 and pleaded that the entire gross receipts cannot be taxed. The Ld. CIT(A) considering the submissions and in the absence of any proof provided by the assessee s representative confirmed the addition made by the AO and dismissed the appeal. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. 4. The assessee has raised the following grounds of appeal: 1. The order passed U/s. 250 of the Act is contrary to the provisions of the law and facts of the case. 2. The Ld. CIT(A) erred in confirming the additions made by the Assessing Officer in respect of entire unaccounted gross receipts without allowing deduction towards expenses in this regard. 3. The Ld. CIT(A) failed to appreciate that at the time of recording statement U/s. 131 of the IT Act, the net income that should suffer to tax has been worked out by the assessee firm at Rs. 7,06,20,000/- for the AY 2012-13 to AY 2019-20 which alone is liable for tax and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO during the assessment proceedings without considering the returns filed U/s. 148 duly disclosing the admitted income during survey proceedings, proceeded to consider the gross receipts (both disclosed and undisclosed) as income of the assessee and assessed the same accordingly. The Ld. AR further submitted that the rate of net profit as per the assessment order worked out to 82.49% which is totally unimaginable. The Ld. AR also submitted that the Assessing Officer while framing the assessment U/s. 143(3) of the Act for the AY 2019-20 relevant to the FY in which survey was conducted wherein the assessee has filed his return of income after fully disclosing the undisclosed income computed during the survey proceedings, the net profit ratio works out to 16% of the assessed income. The Ld. AR therefore pleaded that the same percentage shall be considered as net profit for the impugned assessment year. Per contra, the Ld. Departmental Representative (Ld. DR) relied on the order of the Revenue Authorities. The Ld. DR also submitted that there was no evidence with respect to expenditure relating to the undisclosed income of the assessee for the relevant assessment year and henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of evidences for unaccounted expenditure, it cannot be concluded that the entire gross receipts should be assessed as total income. Further, it is noticed from the sworn in statement U/s. 133A of the Act that the assessee has offered Rs 95 lakhs for the current assessment year as income of the assessee with regard to the unreported income detected during the survey. The survey team has not disputed the income offered by the assessee and has also not treated the gross undisclosed receipts as total income of the assessee. The Ld. AO in his order has quantified the total turnover at Rs. 6,65,99,600/- against which the assessee has offered an amount of Rs. 1,15,71,250/- as taxable income. The net profit ratio accordingly works out to 17.37% with respect to accounted and unaccounted income of the assessee for the AY 2016-17. It is imperative that certain expenses would have been incurred in respect unrecorded sales though not recorded in the books of accounts. During the survey proceedings, while answering to Q.No.30, the assessee stated that No, the entire expenditure related to these receipts is not accounted for in the books of accounts. Therefore it is ascertained by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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