9911796707
TMI Blog2023 (3) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... stimating the income of the assessee when the turnover of the assessee is more than 2 Crores. 3. The Ld. CIT(A, has erred in estimating the income @ 5% of the gross receipts when the assessee himself has estimated the income @ 8%? 4. The Id. CIT(A) erred in admitting additional evidence in the form of bills and vouchers which was not presented during the scrutiny proceedings without calling for remand report 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-rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see on the basis of 5% net profit estimated on total turnover and difference between income offered in the return of income and 5% estimated profit as per directions, should be treated as quantum addition which is liable to be sustained. The relevant findings of the Ld.CIT(A) are as under: 5. Decision: The detailed submissions of the appellant have been considered. The appellant's grievance 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 note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2013-14, 2014-15 and 2015-16 is given as per the table below:- S. No. Financial Year AY Gross Receipts Gross Profit Net Profit GP Ratio NP Ratio Weighted Average 1 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 6,30,00,000 60,00,000 30.58% 2.91% 7 2013-14 2014-15 15,94,07,015 5,60,00,000 48,24,000 35.13% 3.03% 8 2014-15 2015-16 12,80,90,244 3,58,00,000 28,64,000 27.95% 2.24% The weighted average of the 8 years taken together works out to 03.25%. Therefore, logically, AO should have adopted the figure of 03.25% for estimating the appellant's income. However, the appellant was agreeable to a figure of 5% being adopted, which is more than the weighted average worked out above. 5.4 In this case, the Assessing Officer has brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies 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 gross turnover of Rs.3,58,00,000/-, whereas, the receipts as per Form 26AS was at Rs.12,80,90,144/-. Although, the assessee claims to have reconciled difference between turnover as per books of accounts and gross-receipts as per Form 26AS, but on perusal of details filed by the assessee, we find that the assessee could not satisfactorily explained difference in turnover with necessary evidences. Further, the books of accounts maintained by the assessee are not proper which can be verified with necessary evidences. Under those facts, the Ld.CIT(A) came to the conclusion that estimation of profit on total turnover as per Form 26AS, is only a solution to resolve the dispute between the assessee and the AO. Therefore, the Ld.CIT(A) rejected the books of accounts of the assessee and estimated net profit of 5% on gross turnover reported as per Form 26AS in the Income Tax Database. The Ld.CIT(A) while adopting 5% net profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 of the assessee. 11. It was the explanation of the assessee that he had withdrawal of Rs.4,65,82,107/-, while the cash deposits in bank account was at Rs.2,54,40,084/- and in view of the same, the assessee claims that source for cash deposits is out of withdrawal from the same bank account. The assessee further claims that he had received cash from various customers toward rent of stall in exhibitions and advance from customers and receipts against bills and the same has been deposited in bank account. Therefore, further additions towards cash deposits u/s.69A of the Act, amounts to double addition when the AO has considered total receipts for the purpose of estimation of income. 12. 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 the assessee has withdrawal of Rs.4.65 Crs. and deposited of Rs.2.54 Crs. in his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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