Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 406 - ITAT HYDERABADEstimation of GP - Whether the cash deposits made into bank account constitutes the income directly or it constitutes the trade receipts of the assessee, on which percentage of the profits needs to be estimated – Held that:- Assessee in course of assessment proceeding neither appeared nor furnished any information with regard to the cash deposits made into the bank account for whatever may be the reason - total cash deposits made by assessee in his bank accounts - assessee has not maintained any books of account, bills and vouchers, etc. in respect of the business carried on by him - assessee himself has stated that he is engaged in wholesale fruit business - assessee’s claim that he is only acting as a facilitator between purchasers and sellers of fruits in fruit markets is not acceptable in absence of any supporting evidence - assessee’s claim that cash deposits made in the bank accounts represent monies given by buyers and does not belong to him and further fact that he is only earning commission is also not acceptable in absence of any corroborative evidence - the cash deposits made into bank accounts have to be considered as receipts from fruit business carried on by assessee - the deposits made into the bank accounts as receipts from the business of assessee. CIT(A) has observed that minimum profit rate in this line of business is 10%, ultimately, he adopted net profit rate of 15% - the net profit adopted at 15% is high - assessee has not maintained any books of account, therefore, profit of assessee in any way has to be estimated on a reasonable basis - As no comparable case in similar line of business has been brought on record, profit has to be estimated by adopting some principle - it would be appropriate to consider toadopt the net profit rate at 5%. There are not only cash deposits, but there are cash withdrawals also - Therefore, the entire cash deposits made during the year cannot be treated as income of assessee - the peak credit appearing in the bank accounts can be considered as unexplained income of assessee – the AO is directed to verify bank accounts and also examine peak credits worked out by assessee and thereafter make the addition on the basis of peak credit worked out – Decided partly in favour of assessee.
|