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2014 (3) TMI 684 - AT - Income TaxRestriction in addition made u/s 69 of the Act - Net profit @ 5% on total cash deposits made – Held that:- The decision in Kamal Kumar Versus Income-tax Officer [2014 (3) TMI 627 - ITAT AGRA] followed - CIT(A) held that initial stage of assessment clearly prove that the amount deposited in the bank account was in fact sale proceeds of the goods, which were sold by the assessee from time to time against whom the assessee issued cheques to various dealers and earned commission – thus, addition u/s. 69 of the IT Act is wholly unwarranted and unjustified - Since the total deposit being the total sales of the assessee are only Rs.31,62,300/-, thus, the turnover of the assessee did not exceed the amount of Rs.40,00,000/- and as such, the provisions of section 40AF of the Act would apply in the case of assessee for the purpose of computing the profit and gains of retail business, which provides that sum equal to 5% of the total turnover in the previous year on account of such business shall be deemed to be the profit and gains of such business – thus, 5% of the profit rate is applied - The AO made addition mainly on the basis of finding given in assessment year 2008-09 in respect of the same bank account – the CIT(A) had correctly followed the order of the Tribunal – thus, there was no infirmity in the order of CIT(A) – Decided against Revenue. Net profit @ 6% on bank deposits made – Held that:- As decided in earlier years also, the order of the CIT(A) is upheld confirmed on merits for applying the profit rate but the same is modified and it is directed that instead of applying net profit rate of 6% - thus, the authorities below shall apply profit rate of 5% for the purpose of computing part addition as was directed in assessment year 2008-09 – Decided in favour of Assessee.
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