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TMI Blog2023 (6) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... g of appeal has been filed. The Ld. Counsel for the assessee, submitted that the assessee was having severe financial crunch and this lead to delay in filing of the appeals. Therefore, considering the facts and circumstances of the case and also in the interest of justice, delay may be condoned. 3. The ld. DR, opposing petition filed by the assessee for condonation of delay submitted that reasons given by the assessee does not come under reasonable cause for condonation of delay and thus, application filed by the assessee may be dismissed. 4. We have heard both the parties and considered relevant contents of the petition filed by the assessee for condonation of delay. From the petition filed by the assessee, we find that there is a reasonable cause in not filing appeals within time allowed under the Act and therefore, considering the explanation of the assessee, the delay in filing of appeals for assessment years 2008-09 & 2013-14 are condoned. 5. The assessee, has more or less filed common grounds of appeal for all the assessment years. Therefore, for the sake of brevity, grounds of appeal filed for assessment year 2008-09 are reproduced as under: "The order dated 31.01.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Tamilnadu Co-operative Milk Producers Federation Ltd. Therefore, submitted that provisions of section 40A(3) of the Act, cannot be invoked, because the assessee case is covered under exception provided under Rule 6DD(e) of the I.T. Rules, 1962. The Assessing Officer, after considering relevant submissions of the assessee and also following certain judicial precedents, opined that the case of the assessee does not come under Rule 6DD(e)(ii) of the I.T. Rules, 1962 and thus, segregated cash payment in excess of Rs. 20,000/- amounting to Rs. 9,92,55,861/- and made additions u/s. 40A(3) of the Act. In so far as balance amount of Rs. 11,73,56,175/-, rejected explanation of the assessee and estimated 10% on total expenditure and made additions of Rs. 1,17,35,617/-. 7. Being aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the ld. CIT(A), the assessee challenged re-opening of assessment on the ground that the assessment has been re-opened on mere 'change of opinion' and also in violation of provisions of section 147 of the Act, because the assessment has been re-opened after a period of four years from the end of the relevant assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, further on merits of the issue submitted that the addition made by the Assessing Officer towards estimation of disallowance on cash expenditure and further findings of the CIT(A) to reduce disallowance to 5% on total cash expenses is not supported by any evidence. He further submitted that the assessee is having very less margin in this business, because he is involved in distribution of milk products, where he earns 2% of margin on sales. Therefore, submitted that reasonable amount of profit may be estimated from cash expenses. 10. The ld. DR, on the other hand submitted that the assessment has been reopened u/s. 147 of the Act, as per reasons recorded it clearly shows that there is no disclosure of necessary facts for completion of assessment and thus, the CIT(A) has rightly rejected arguments of the assessee on the legal issue and their order should be upheld. The DR, further submitted that in so far as estimation of disallowance of cash expenses, the ld. CIT(A) after considering relevant submissions and also taken note of various facts scaled down estimation to 5% from 10% and thus, there is no reason to give further relief to the assessee. In so far as revenue appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hart filed by the assessee, we find that the assessee is having 2% gross profit margin on sales and after expenses, the net profit percentage is below 1% for all assessment years. Further, although the assessee claims to have earned less than 1% net profit, but could not justify said profit with necessary evidence. Since, both the parties failed to prove their case with necessary evidence and reasons, in our considered view to settle dispute between the assessee and the Assessing Officer, a reasonable amount of disallowance needs to be estimated. Therefore, considering the fact that the assessee is a distributor for milk product and also in this line of business, the percentage of profit is very less, we deem it appropriate to direct the Assessing Officer to disallow 4% of cash expenses. Accordingly, the Assessing Officer is directed to disallow 4% on total cash expenses in excess of prescribed limit. 13. Coming back to the revenue appeal. The revenue has challenged the findings of the CIT(A) in directing the Assessing Officer to verify the applicability of provisions of Rules 6DD(e) of the I.T. Rules, 1962, on the ground that the CIT(A) does not have any power to set aside the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the issue on merits. Therefore, in the interest of justice, one more opportunity may be given to the assessee to go back to the CIT(A) to explain its case. The ld. CIT-DR, on the other hand supporting the order of the CIT(A) submitted that, the assessee did not appear before the CIT(A) inspite of repeated opportunities, which is evident from the order of the CIT(A). Therefore, there is no reason to given one more opportunity of hearing to the appellant. 18. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The CIT(A) had dismissed appeal filed by the assessee for assessment years 2010-11 & 2012-13 on technical ground for not appearing for hearing on the date when appeal was posted for hearing. Although, the CIT(A) dismissed appeal filed by the assessee for want of prosecution, but these appeals have been dismissed on technical grounds without discussing the issues on merits. It is a well settled principal of law by the decisions of various courts and tribunals, that in a case where the appellant is not appearing for the hearing, the appellate authorities should dispose off the appeals on merits on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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