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2017 (11) TMI 1063 - AT - Income TaxDisallowance of expenses made in the transport business of the assessee by applying net profit of 5% - Held that:- There is no illegality in the action of the AO in disallowing the claim of expenditure under each head. The CIT(A) after considering the previous history of declared total income estimated the income @ 5%. We find that the estimation of income may be adopted in the case when the assessee has not produced any supporting evidence and to bring the controversy to an end. There is no dispute that the income of the assessee was assessed to tax as a result of disallowance made by the AO is equal to 12.70% of the turnover which is on the higher side in transport business and therefore a reasonable and proper estimate was required to be made in this case of the assessee. The ld. CIT(A) has estimated the income of the assessee at 5% thereby restricted the disallowance of ₹ 10,01,460/- as against the total disallowance made by the AO of ₹ 34,00,216. Having regard to the facts and circumstances of the case where the assessee has failed to produce any supporting evidence as well as proper books of accounts in support of the claim we are of the considered view that the proper and just estimation of the income. The impugned order is accordingly modified. Accordingly this ground of the Revenue is partly allowed. Disallowance expenditure in the liquor expenses - assessee failed to produce any supporting evidence as well as books of accounts - CIT(A) restricted the disallowance by estimating the net profit of the assessee at 4% in the liquor business - Held that:- This issue is identical as raised in the ground no. (i), therefore, having regard to the facts and circumstances of the case and our finding in respect of the ground no. (i). We think it proper and reasonable to estimate the income in the liquor business @ 5%. The impugned order of the ld CIT(A) is accordingly modified. This ground is Revenue is party allowed. Addition u/s 68 - unexplained cash deposit - Held that:- We find that when the Assessing Officer has made the addition on various heads and part of which was sustained by the CIT(A) amounting to many times more than this deposit made in the bank account then the assessee is entitled for the benefit of telescopic to the extent of the other addition sustained by that appeal. Hence, we do not find any error or illegality in the order of the ld. CIT(A) qua this issue. Unexplained loan account to various persons - addition deleted by the ld. CIT(A) by giving the benefit of telescopic - Held that:- Once the Assessing Officer has accepted the agricultural income of more than ₹ 50 lacs then accepting the claim by the ld. CIT(A) to the tune of ₹ 34 lacs in bank deposit which is specifically shown as sale proceed of food soyabin cannot be found fault with. Hence, to the extent of sources of deposit of ₹ 34 lacs we do not find any error or illegality in the order of the ld. CIT(A). As regards the balance amount of ₹ 63 lacs the ld. CIT(A) has deleted the said addition by considering the fact that the turnover of assessee from the transport and liquor business is ₹ 8.22 crores, therefore, the said amount of ₹ 63 lacs can be sourced from the receipt of wine and transport business. He further noted that the closing balance in the account of the assessee was only ₹ 3,13,001/- and therefore the deposit were made by the assessee throughout the year under consideration. Since this deposit was not in lump sum but spread over during the year therefore, we do not find any reason to interfere with the order of the ld. CIT(A) by accepting the source of the deposit as receipt from the wine and transport business. As regards the benefit of telescopic of ₹ 12,01,000/- when the addition sustained by the ld. CIT(A) exceeds the cumulative amount of deposits in the bank and advance given to the party then we do not find any error or illegality in granting the said benefit of telescopic.
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