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TMI Blog2023 (1) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal proceedings before the learned CIT(A) had requested to adopt the net profit rate of 5%. Under these circumstances, we do not find any infirmity in the order of the learned CIT(A) restricting the profit rate at 5% of the turnover. The ground raised by the assessee on this issue is accordingly dismissed. Addition being interest from sundry debtors - HELD THAT:- Admittedly, the addition was made on the basis of statement recorded u/s 131 dated 15.3.2017 from Shri P. Hema Kumar Reddy who in his answer to question No.12 had stated that the assessee group charges interest @ 18% per annum uniformly. Statement was not recorded from the assessee and the statement was recorded only on 15.3.2017. There is no iota of any evidence found during the course of search that the assessee has received any interest during the impugned A.Y nor the Assessing Officer questioned Shri P. Hema Kumar Reddy for the impugned A.Y. Nothing has been brought on record by the Assessing Officer that the debtors were questioned/confronted and that they have admitted to have given any interest to the assessee. Under these circumstances we are of the considered opinion that the addition being interest @ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee appeared from time to time and filed the requisite details. 4.1 During the course of the assessment proceedings, the Assessing Officer noted that the assessee has shown sundry debtors of Rs.6,50,000/- in the balance sheet as on 31.3.2011. However, the assessee has not disclosed any interest income from sundry debtors. The Assessing Officer asked the assessee to explain as to why interest @ 18% from sundry debtors should not be added to the total income of the assessee, since the same was admitted by one of the members of the group in the sworn statement at the time of search and such interest income was offered at more than 18% per annum for the A.Y 2016-17 by the assessee himself. The assessee objected to the same and stated that all the debtors will not pay interest and therefore, such a proposition is incorrect. However, the Assessing Officer did not accept the contention of the assessee and made addition of Rs.1,17,200/- to the total income of the assessee being interest income from sundry debtors. 5. Similarly, the Assessing Officer noted that the assessee has shown net profit of Rs.2,11,063/- which is 2.7% of the total sales of Rs.78,91,440/- from the sale of li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g material found during the course of search in all the 5 appeals. However, the learned Counsel for the assessee did not press the additional ground for which the learned DR has no objection. Accordingly, the additional ground raised by the assessee in all the 5 appeals is dismissed as not pressed. 10. So far as the issue raised by the assessee challenging the estimation of profit @5% of the turnover is concerned, the learned Counsel for the assessee submitted that such estimation of profit @ 5% is not proper. Referring to the decision of the Vizag Bench of the Tribunal in the case of Shri K. Srinivasa Rao in ITA Nos.14 15/Viz/2020 order dated 8.4.2022 for the A.Y 2013-14, she submitted that the Tribunal under identical circumstances, has estimated the income @3% of the turnover. She accordingly submitted that the profit from liquor business should be estimated @3% of the turnover. 11. The learned DR, on the other hand, heavily relied on the order of the lower authorities. He submitted that the assessee during the course of assessment proceedings as well as appellate proceedings before the learned CIT (A) has admitted the profit @ 5% of the turnover. Further, the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in the ground of appeal relates to the addition of Rs.1,17,000/- being interest from sundry debtors. 14. After hearing both sides we find the assessee had not disclosed any interest income from sundry debtors. We find the Assessing Officer computed such interest @ 18% on the sundry debtors of Rs.6,50,000/- as on 31.3.2011 on the ground that the assessee himself had voluntarily offered interest income from sundry debtors at more than 18% per annum for A.Y 2016-17 and Shri Hema Kumar Reddy, one of the persons of the group, in his sworn statement recorded u/s 131 on 15.3.2017 in his reply to question No.12 had stated that the assessee group charges interest @ 18% p.a. uniformly. While doing so the Assessing Officer rejected the explanation of the assessee that all the debtors are not giving interest and therefore, no interest should be calculated for making addition to the total income of the assessee. We find in appeal, the learned CIT (A) upheld the addition made by the Assessing Officer. It is the submission of the learned Counsel for the assessee that such an addition of interest is not based on any incriminating material found during the course of search nor the same was s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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