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2017 (3) TMI 681 - ITAT HYDERABADIncome estimation at 5% of the stock put to sale - Held that:- As seen from the earlier year’s statements of account, it is true that the excise rental was at 9.68% of the sales for the year ending 31-03-2007 and at 9.10% for 31-03-2008, whereas for the impugned assessment year, the excise rental comes to 11%. However, as seen from the trading accounts, the gross profit for the year ending 31-03-2007 was at 15.60% for the year ending 31-03-2008, the gross profit was at 14.47%. In the impugned year, the gross profit works out to 18%. This indicates that the factor of excise rental has been compensated by the higher sale price as can be seen from the trading results. Thus, argument on payment of excise rental at higher rate does not stand. As seen from the order of the CIT(A), Ld.CIT(A) followed the decision in the case of M/s. Amaravathi Wine Shop [2012 (8) TMI 706 - ITAT, HYDERABAD] and that assessee has not made out any case to differ from the estimation of profit at 5% on cost of stock put to sale, subject to income from the business is not less than the profit earned as per the P&L A/c. Cash deposits in the bank account - Held that:- If it is a money deposited earlier and withdrawn and utilised in the business the same would not be available for further deposits. Since the same was not shown in the balance sheet as on 31-03-2008, the credit for the amount of ₹ 8 Lakhs as available on 31-03-2008 cannot be accepted, even though it is a fact that he withdrew the amount on that date. Since assessee has chosen not to show these transactions in the books of account and has not furnished any evidence that the withdrawn cash was available on that day, it is not possible to give credit for the amount. However, since there are deposits and withdrawals during the year, the contention of peak credit can be accepted as there are no other investments or expenditures which are subjected to verification by the AO. In view of that, AO is directed to verify the working provided by assessee and make addition accordingly, considering the transactions only for the year under consideration. If the working provided is acceptable then AO is directed to accept the peak at ₹ 5,81,192/-. Otherwise he is directed to rework the same after giving due opportunity to assessee.
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