9911796707
TMI Blog2023 (3) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... is exorbitant, which gives distorted figures. Therefore, she has made a fair estimation of 5% net profit by taking into account net profit estimated by the AO for earlier assessment years and also the directions of the JCIT s order u/s.144A of the Act, for the AY 2016-17. The method followed by the Ld.CIT(A) to determine income of the assessee is appears to be reasonable and thus, we are of the considered view that there is no reason to interfere with findings given by the Ld.CIT(A) to estimate 5% net profit on grossreceipts as per Form 26AS. Thus, we are inclined to uphold the findings of the Ld.CIT(A) and dismiss the appeal filed by the Revenue for the AY 2015- 16. Estimation of profit on cash deposits found in the bank account of the assessee - AO was of the opinion that the assessee could not explain source for cash deposits and thus, treated cash deposits as unexplained income of the assessee - HELD THAT:- AO has made addition towards difference in gross turnover as no business income of the assessee. Ideally, when the AO has treated gross-receipts as per Form 26AS as business turnover of the assessee, then addition made towards differential turnover as business incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from AO thereby violating Rule 47A? 5. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored. 3. The brief facts of the case are that the assessee is an individual carrying on business of Advertisement Consultancy, Real Estate Agents, etc., under the name and style of Cedilla Communications and Catalyst Properties . The assessee has filed his return of income for the AY 2015- 16 on 30.09.2015 admitting total income of Rs.62,74,050/-. The case was selected for scrutiny and during the course of assessment proceedings, the AO noticed that there is a difference between the gross turnover reported in the books of accounts when compared to gross-receipts as per Form 26AS. Therefore, called upon the assessee to explain as to why the difference in turnover should not be treated as income of the assessee. In response, the assessee submitted that he has offered turnover in the books of accounts net of all expenses which resulted difference in turnover when compared to gross-receipts as per Form 26AS. The AO, however, was not convinced with the explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vance is directed at the Assessing Officer's action of bringing to tax the difference between the amount reflected as per Form 26AS amount and amount disclosed in the appellant's Income Tax Return. The sum added was Rs.8,94,26,230/-. I find from the records that in the assessment order copy for Assessment Year 2016-17, which is subsequent to the subject Assessment Year, the Assessing Officer has sought the direction of the Range head the JCIT, Non-Corporate Rage-1, Chennai in respect of this matter. The JCIT vide order dated 24.12.2018 had directed the AO to estimate the income at 5% and the relevant portion of the directions are reproduced as under: The submissions of the assessee, the inspector's report and the other materials available in the record were perused. It is noted from the Inspector's report that expenses for the major portion are genuine. The only issue that remains is that the assessee has not produced complete verifiable evidence for the expenses to the tune of Rs.1, 90, 88, 343/-. During the hearing, the assessee claimed that there has been huge expenditure in connection with indirect expenses such as salary to canvassing agents, petrol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-08 2008-09 5,48,79,251 1,26,06,510 19,89,273 22.97% 3.62% 3.25% 2 2008-09 2009-10 6,37,90,342 72,83,327 21,86,820 11.42% 3.43% 3 2009-10 2010-11 7,98,07,280 2,27,67,103 22,40,360 28.53% 2.81% 4 2010-11 2011-12 13,04,15,526 2,03,35,956 52,44,414 15.59% 4.02% 5 2011-12 2012-13 14,27,79,995 6,95,00,000 58,00,000 48.67% 4.00% 6 2012-13 2013-14 20,59,58,759 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the other hand, supporting the order of the Ld.CIT(A) submitted that the assessee has explained difference in turnover as per Form 26AS and turnover reported in books of accounts. The assessee has explained reasons for estimating 5% net profit on gross total turnover and such request is based on the directions of the JCIT in 144A order for the AY 2016-17, where a similar direction has been given to the AO to estimate 5% profit on gross-receipts. The Ld.Counsel for the assessee further submitted that the Department has estimated 5% net profit in earlier assessment years too. The Ld.CIT(A) after considering relevant facts has rightly estimated 5% profit on total turnover including difference in turnover as per Form 26AS and books of accounts of the assessee and their orders should be upheld. 7. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. There is no dispute with regard to the fact that there is a difference between turnover as per books of accounts of the assessee reported in ITR filed for relevant to AY and gross-receipts as per Form 26AS in the Income Tax Database. The assessee has reported gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the extent of change in facts on account of addition towards cash deposits found in the bank account of the assessee. The reasons given by us in the preceding paragraphs in ITA No.3494/Chny/2019, shall mutatis mutandis , apply to this appeal as well. Therefore, for similar reasons, we are inclined to uphold the findings of the Ld.CIT(A) in estimating 5% net profit on gross-receipts as per Form 26AS. 10. As regards estimation of profit on cash deposits found in the bank account of the assessee in addition to difference in gross-receipts, the AO has made addition towards cash deposits in bank account to the extent of Rs.2,54,40,084/- as income of the assessee u/s.69A of the Act. According to the AO, the assessee could not explain source for cash deposits found in the bank account. The AO further noticed that the assessee claims that source for cash deposits is out of rental advances and other receipts from customers, whereas, the so-called rental receipts do not appear in the books of accounts maintained by the assessee. Therefore, the AO was of the opinion that the assessee could not explain source for cash deposits and thus, treated cash deposits as unexplained income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad considered even cash deposits as turnover of the assessee for the purpose of estimation of business income, on the ground, books of accounts maintained by the assessee are not susceptible for verification. Therefore, she has considered total receipts as per Form 26AS, including cash deposits found in the bank account of the assessee and estimated net profit of 5% on total receipts. In our considered view, the Ld.CIT(A) has taken a reasonable view taking into account overall facts and circumstances of the case and has estimated net profit of 5% which is further strengthened by the fact that in earlier assessment years, the AO himself has estimated 5% net profit on total turnover on the basis of directions of the JCIT s order passed u/s.144A of the Act for the AY 2016-17. Therefore, we are of the considered view that there is no error in the reasons given by the Ld.CIT(A) to estimate net profit at 5% on total turnover, including cash deposits found in the bank account of the assessee and thus, we reject the ground taken by the Revenue. 13. In the result, appeal filed by the Revenue in ITA No.3493/Chny/2019 for the AY 2013-14 is dismissed. 14. In the result, appeals filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
