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2016 (4) TMI 422 - ITAT DELHIUndeclared cash deposits - treated as business receipts - Held that:- All the sales of the assessee are made in cash, and the assessee failed to substantiate why cash deposit of ₹ 19,93,152/- were only sales of the business receipts and not entire cash deposits. The explanation of the assessee that the withdrawals were re-deposited was not accepted by the AO as well as by the CIT(A) in absence of any evidence in support of its claim that withdrawals were re-deposited in bank account. We find that the ratio of the cases cited by the assessee is not applicable over the facts of the case as the assessee himself has failed to support its claim of re-deposit of withdrawals and its normal human behavior that no prudent person will withdraw the money and re-deposit into banks without any justified reasons. In view of the circumstances of unverified purchases, cash sales and expenses of the business activity etc, we don’t find any justification in submissions of the assessee in this regard, and in our opinion , the CIT(A) has rightly held entire cash deposits as business receipts of the assessee. - Decided against assessee N.P. percentage selection - Held that:- We agree with the contention of the ld. AR that when the AO has already rejected the sales figure of the assessee declared in the original letter as being on estimate and without any evidence, there is no justification on the part of the Assessing Officer to adopt the net profit rate of 20 percent. shown on the basis of estimate and without any evidences. Further neither the Assessing Officer nor the ld. CIT(A) has brought on record any comparable case having 20 percent net profit rate in the retail business similar to the business carried on by the assessee. In such circumstances, we are of the opinion that the adopting the net profit rate of the eight percent. is most appropriate , which has been provided under section 44AD of Act for retail business having business turnover not exceeding ₹ 60 lacs. As the assessee has also declared its profit from the business under presumptive taxation under section 44AD of the Act, we hold that net profit rate of 8% is appropriate net profit rate and direct the Assessing Officer to apply the net profit rate of 8%, on the business receipt of ₹ 36,05,497/- and compute the net profit of the assessee from business accordingly.
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