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2013 (6) TMI 473 - ITAT AGRABest judgement assessment, Addition towards the income from liquor business - Held that:- It is found that estimation made by the A.O. is based on mathematical formula and simply on mathematical formula income cannot be estimated. The A.O. made the addition of entire/gross sale whereas as decided in Manmohan Sadava vs. CITR, (2007 (10) TMI 246 - MADHYA PRADESH HIGH COURT) following CIT vs. Balchand Ajit Kumar (2003 (4) TMI 76 - MADHYA PRADESH High Court) entire sale proceeds of the assessee cannot be added to the income, only net profit is to be added. Thus, the A.O's finding is contrary to finding of judgement of Hon'ble M.P. High Court. The CIT(A) on one hand rejected the working of estimation of the A.O. and, on the other hand, he relied upon rejected working of the A.O and addition was sustained. Under the circumstances, both the orders of the A.O. and CIT(A) connote be sustained. As stated while making best judgement one should have reasonable nexus to the available material and circumstances. In the case under consideration, both A.O. and CIT(A) have ignored the past history of the assessee, thus on perusal of comparative chart, it is noticed that in the year under consideration the assessee has shown comparatively better result, as G.P. is 7.34% and not profit 2.13%. Thus it will be fair and just if addition to the extent of ₹ 20,00,000/- is sustained which will cover all deficiencies and lapses noticed by the A.O. and balance addition of ₹ 6,94,40,512/- (7,14,40,512 - 20,00,000) made by the A.O. is deleted. Thus, ground of the assessee's appeal are partly allowed. Estimation of agricultural income - in absence of evidence provided by assessee the A.O. taken 40% of the said amount of which calculation comes to ₹ 4,84,124/- and the same was treated as income from other sources - Held that:- Since the A.O. himself has accepted the agricultural income in A.Y. 2008-09 and to maintain consistency the A.O. should follow the same formula in the year under consideration as followed in A.Y. 2008-09 since the land holding and other facts are similar. Therefore, the A,O, is directed to calculate the agricultural income in accordance with the income determined in A.Y. 2008-09. In favour of assessee for statistical purposes Addition u/s 68 - It was submission of the assessee that considering the nature of business of the assessee, some time such loans are necessary and assessee has sufficient material to prove the same - Held that:- It will be appropriate to send back this issue to the file of A.O. with the direction to decide the issue afresh as complete facts of the issue has not been brought on record considering the business expediency and nature of business of the assessee. The A.O. may also consider the alternate contention of the AR for set off of addition, if any, against the addition sustained on account of profit as in the case under consideration which has been sustained at ₹ 20,00,000/-. The A.O. may decide the issue after providing reasonable opportunity of hearing to the assessee. In favour of assessee for statistical purposes.
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