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TMI Blog2023 (8) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, dated 16/12/2019 for the AY 2015-16. 2. Brief facts of the case are that the assessee is a coaching institute and gives coaching for all competition exams in the name style of 'Sreedhar's CCE', filed its return of income for the AY 2015-16 on 30/09/2015 admitting a total income of Rs. 9,19,460/-. A survey operation u/s. 133A of the Act was conducted on 26/02/2019. During the course of survey the survey team noticed fee collection sheets for the period from the Financial Year 2011-12 to 2018-19 in the premises of the assessee firm and they were impounded. The partners of the firm vide their statement recorded on 27/02/2018 and 01/03/2019 confirmed the suppression of receipts. The Assessing Officer having reasons to believe that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 3. 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 unrecorded receipts and unrecorded exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AY 2016-17 in ITA No. 127/Viz/2022 (supra), wherein under identical circumstances, the Tribunal held that the profit ratio of unaccounted income of the assessee shall be computed @ 18% , which is as accepted by the assessee during the survey proceedings. For the sake of ready reference, the relevant paragraphs of the Tribunal's order dated 21/07/2022 (supra) are reproduced herein below: "6. We have heard the rival parties and perused the material available on record and gone through the orders of the Authorities below. Admitted facts are that the survey operation conducted on the assessee's premises on 26/02/2019 wherein certain incriminating materials was found with respect to unaccounted receipts of the firm for the FYs 2011-12 to 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n average disclosed 8% to 10% on the reported turnover. Further, we also find from the assessment order passed for the AY 2019-20 u/s. 143(3) of the act, the net profit ratio including the reported and unreported incomes worked out to 16% as detailed in page 128 of the paper book. In the absence of evidences for unaccounted expenditure, it cannot be concluded that the entire gross receipts should be assessed as tot al 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome under the Income Tax Act. The tax is on income but on gross receipts." Respectfully following the judicial precedents and in view of the above discussions, we find that taxing the entire gross receipts, where the Net Profit ratio is at 82.49%, by AO for the relevant assessment year is not justifiable by any stretch of imagination. Similarly the plea of the Ld.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. Therefore, we are of the considered view that the net profit ratio shall be computed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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