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2015 (10) TMI 1485 - ITAT HYDERABADEstimation of income - surrender of income to settle and to purchase peace with the department - Held that:- As seen from the orders, except admitting income at 5% on the liquor sales there was no other agreed addition as stated by the Ld. CIT(A) in the order. Even though assessee has contested the income on sale of liquor at 5%, we are of the opinion that this estimation is reasonable considering the facts of the case. However, the A.O. is directed to correct the arithmetic error that occurred in the order. Estimation of income on food items at 20% - Held that:- A.O. has not given any comparable cases to arrive at the profit of 20% on food sales. He simply estimated at 20% without there being any basis. Considering the facts of the business and location of the appellant Bar and Restaurant in Hyderabad, we are of the opinion that income can be estimated at 10% of the food sales. Accordingly, assessee has gets relief. A.O. is directed to adopt income of ₹ 1,96,400 as against ₹ 3,92,800 added by him in the order. Addition of ₹ 24 lakhs as income offered from Bar and Restaurant by the assessee's partner - Held that:- Except the statement given by the partner during the course of survey, there is no other evidence establishing that assessee could earn that much income from the business. During the survey no incriminating material was found nor any excess stock was found. Even though books of accounts were rejected that does not mean the declaration given by the partner in the course of survey has any relevance for the business activity of the assessee. There was no evidence brought on record by the Revenue either in the form of excess stock found during the survey or excess cash available with the assessee or any other incriminating material to establish that assessee is earning unaccounted incomes. As can be seen from the statement also after enquiring about assessee's business activities, various investments, turnovers etc., and after conclusion of statement, last question was asked in the 11 page of the statement asking the assessee whether he want to state any thing further. At that point of time, assessee's partner seems to have declared additional ₹ 24 lakhs in order to "settle" with the Income Tax Department. In view of the scope and ambit of the materials collected during the course of survey, the action under section 133A would not have any evidentiary value and that it could not be said solely on the basis of the statement given by one of the partners of the firm that the disclosed income was assessable as lawful income of the assessee. The statement given by the partner has no rational linking to the issues being enquired nor for the incomes of the business. Therefore, the same cannot be considered as a basis for making the addition. Under these circumstances, we are of the opinion that there is no basis for making an addition of ₹ 24 lakhs solely on the basis of statement. In view of this, we have no hesitation in deleting the same. A.O. is directed to re-work out the incomes accordingly. - Decided in favour of assessee in part by way of remand.
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