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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 ..... ring the survey proceedings. Thus we hereby direct the Ld. AO to compute the net profit ratio of unaccounted income of the assessee at the rate of 18%. Appeal of the assessee is allowed. - SHRI DUVVURU RL REDDY, HON BLE JUDICIAL MEMBER SHRI S BALAKRISHNAN, HON BLE ACCOUNTANT MEMBER For the Appellant : Sri C. Subrahmanyam, CA For the Respondent : Sri ON Hari Prasada Rao, Sr. AR ORDER PER S. BALAKRISHNAN, Accountant Member : This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-3, Visakhapatnam [Ld. CIT(A)] in DIN Order No. ITBA/APL/S/250/2022-23/1043695051(1), dated 30/06/2022 arising out of the order passed u/s. 147 r.w.s 144 of the Act, dated 16/12/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AY 2015-16 at Rs. 2,86,25,360/-. The AO deducted the income already offered by the assessee while filing the original return and income accepted by the assessee during the survey proceedings based on the return filed in response to Notice u/s 148, and considered the remaining amount of Rs. 78,35,360/- as the income of the assessee for the AY 2015-16 and added the same to the total income of the assessee determining the assessed income at Rs. 7,19,64,960/-. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee s representative made required submissions with respect to the incomes accepted during the course of survey for the AY 2016-17 and pleaded that the entire gross rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016-17 in ITA No. 127/Viz/2022 and others, dated 21/07/2022, submitted that 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. The Ld. AR therefore prayed that since there is no change in the facts and circumstances of the case, the same decision of the Tribunal may also be applied to the instant case also. On the other hand Ld. DR relied on the orders of the Ld. Revenue Authorities. 5. We have heard both the sides and perused the material available on record and the orders of the Ld. Revenue Authorities. We have also gone through the order of the Tribunal in the assessee s own case for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e receipts of Rs. 29,49,39,973/- has already been accounted for in your books of accounts? If not, please provide the details for the same. Ans. No, the entire expenditure related to these receipts is not accounted for in the books of accounts. 7. We find merit in the argument of the Ld. AR that by no stretch of imagination the profit percentage as assessed by the AO while passing the order us/ 143(3) r.w.s 147, cannot be 82.49%. As admitted by the assessee in the sworn statement u/s 133A of the Act, we are of the considered view that certain expenditure must have been incurred by the assessee in earning such undisclosed income which was not accounted by the assessee. We also find from page 126 of the paper book that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that there exists unexplained expenditure relatable to the unaccounted receipts. The computation of profit after inclusion of unaccounted sales in the turnover would necessarily require deduction of unrecorded expenses. The Courts in such cases have taken the view that there is a presumption of expenditure having been incurred in respect of unrecorded sales. The Hon ble Supreme Court in the case of CIT vs. Williamson Financial Services [2007] 165 taxmann 638 (SC) has observed as follows: It is pertinent to bear in mind that u/s. 4 the levy is on total income of the assessee computed in accordance with an subject to the provisions of the Income Tax Act. What is chargeable to tax under the Income Tax Act is not the gross recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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