9911796707
TMI Blog2024 (9) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... A) deleted - Decided in favour of assessee. Estimation of profit @ 8% based on seized material - CIT(A) reduced the profit rate to 5% - HELD THAT:- It is well-settled that in the case of sales, the Revenue has to make an honest and fair estimate of the income by applying the profit rate declared in the preceding years. Considering that the assessee is engaged in the business of trading in Kirana items, we are of the opinion that the profit at the rate of 4% shall meet justice. Therefore, we reduce the net profit rate to 4%. Whether the additional income declared by the assessee of ₹ 75 lakh covers the addition based on 4% net profit estimated on the turnover? - HELD THAT:-We find that the learned CIT(A) has recorded that the assessee offered ₹ 75 lakh as additional income, which duly covers the profit @ 4% on the total turnover and hence needs to be telescoped. Hence no separate addition is warranted and the entire addition of net profit as modified is deleted. In effect, the returned income is directed to be modified in the light of the above discussions. - Shri V. Durga Rao, Judicial Member And Shri K.M. Roy, Accountant, Member For the Assessee : Shri Himesh Demle F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A), the assessee made following submissions: 6.2. At the outset, the assessee would like to explain the Unexplained Investment in Immovable property u/s 69 of the I.T. Act, 1961. During the concerned A.Y., the assessee has purchased an immovable property being piece and parcel of land bearing 72A having area 743 sq mtrs Kh No 63, 64, and 69 Chikhli, 46 Sheet No 411/78 of House No 1252/72/A Ward No 22 of Chikhli Layout for an total consideration of Rs. 85,00,000/- on 16.05.2019. 6.3. It is humbly submitted before your honour that the Ld. A.O. has relied on the seized material i.e. Party H-2/Annexure B-14, and has observed that the assessee has paid a substantial amount of cash for the purchase of the immovable property from Shri Manoj Dayani. As stated by the Ld, A.O. that there is conversation between the seller and the other person, wherein it was stated that the sale agreement was made for the amount of Rs. 1,18,00,000/-, but the sale deed has been executed for Rs. . 85,00,000/- only. 6.4. The assessee would like to invite your honour s kind attention towards the fact that the assessee has truly and fairly paid the sale consideration to Shri Manoj Dayani and the transactions are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover on the basis of commission and consignment basis for which the assessee having only commission income. The said turnover in respect of commission and consignment has not been recorded in regular books of accounts. However the assessee has earned certain amount of commission and the assessee has already offered an additional income of Rs. . 75,00,000/-in respect of certain unreconciled transaction in the return filed under section 153A in respect of assessment year 20-21. 6.18. Without prejudice to the above, the assessee would like to humbly submit before your honour that the Ld. A.O. has erred in considering the rate @8%, whereas the same shall be considered at 3%, on the basis of the previous Net Profit ratio declared by the assessee. 6.19. The assessee would like to submit the comparative turnover, net profit and percentages are as under: A.Y Turnover NP % NP 2020-21 5,20,34,173 13,28,667 2.55 2019-20 5,98,93,557 17,53,453 2.93 2018-19 3,23,76,018 14,65,367 4.53 Average % 3.34 From the above figures, your honour will observe that he percentage of net profit is 3%. If the assessing officer wants to assess income on basis of the dump documents, it should be assessed at 3% b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -19, 2019-20 2020-21 and 93,00,000/- for A.Y. 2020-21, 2019-20 and 2014-15 has been offered in case of Shri Ajay Kamnani. Hence considering the above facts Grounds no. 5 to 8 are disposed of as above. 5. Result: In the result, the appeals filed by the appellant for A.Y. 2020-21 are treated as partially allowed . 7. The assessee being aggrieved, filed an appeal before the Tribunal. 8. Before us, the learned Departmental Representative strongly relied on the order of the Assessing Officer, Learned CIT(A). 9. Ground no.1, is general and need not be adjudicated. 10. On the other hand, the learned A.R. submitted that the Assessing Officer made the same addition in the hands of the vendor, Shri Manoj Dayani, also towards suppressed consideration of ₹ 33 lakh. However, the same addition was deleted during the appellate proceedings in case of the vendor by the same CIT(A) relying upon the statement recorded of the assessee by the counsel of the vendor in cross-examination dated 27/03/2023. The affidavit of the vendor dated 23/09/2021 was also examined. During the cross examination held on 27/03/2023, the counsel of the vendor heavily relied upon the statement of assessee, wherein bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter is concurrent to that extent and the learned D.R. failed to demolish the binding precedent of the finality in case of seller, we find no compelling reason to differ from the decision taken in the case of the vendor, Shri Manoj Dayani, who is a party of the alleged transaction. Consequently, we set aside the impugned order passed by the learned CIT(A) and delete the addition of ₹ 33 lakh made by the Assessing Officer and confirmed by the learned CIT(A). Thus, ground no.2, 3 and 4, are allowed. 13. Ground no.5, relates to estimation of profit percentage on the turnover, as modified by the learned CIT(A). 14. Before us, the learned Departmental Representative vehemently argued that the Assessing Officer had correctly estimated the profit @ 8% based on seized material. 15. On the other hand, the learned A.R. submitted that the profit ratio in the trading business is not more than 3%. A chart showing the comparative profit ratio declared by the assessee and accepted by the Revenue authorities have been submitted in the paper book by the learned A.R., wherein it is demonstrated that the assessee has declared a profit percentage not exceeding 3%. It has also been argued that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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