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2019 (10) TMI 78 - AT - Income TaxTrading addition by applying N.P. rate at 8% of liquor sale - HELD THAT:- When the A.O. proposed to estimate the income by applying net profit at 6% then adopting the net profit at 8% without giving the reasons for change of its stand and increasing the net profit percentage for estimation of the income is not justified. When the A.O. as well as the CIT(A) has not given any reasonable and proper basis for adopting net profit at 8% to estimate the income of the assessee from liquor business then the original proposed net profit at 6% as shown in the show cause notice and confronted with the assessee ought to have applied for estimation of the income. Once the assessee was asked to show cause as to why 6% net profit should not be applied for estimation of income, the A.O. should not apply a higher rate until and unless some cogent and tangible reasons are shown for doing so. Accordingly, estimation of income from the liquor business is restricted to 6%. Addition on account of agricultural income treated as income from other sources - HELD THAT:- the assessee was not able to substantiate the claim of agricultural income of ₹ 2,50,000/- declared in the original return of income. Once the assessment is framed based only on original return of income then the excess claim of agricultural income in the original return of income is a subject matter of scrutiny and enquiry. The assessee himself has admitted that actual agricultural income is only ₹ 90,500/-, therefore, the excess amount of agricultural income declared in the original return of income is liable to be added as income from undisclosed sources under the head income from other sources. Addition from the business of truck hiring - estimation as per the provisions of Section 44AE - HELD THAT:- A.O. has not disputed that the assessee has offered income under the provisions of Section 44AE of the Act in respect of the truck hiring business, however, in the process of applying the presumptive provisions U/s 44AE of the Act, the A.O. has estimated the income without citing any basis or criteria. Therefore, the income of the assessee is required to be estimated as per the provisions of Section 44AE of the Act. From perusal of the relevant record and particularly the registration certification of the vehicles, it is noted that all these vehicles owned by the assessee are heavy commercial goods vehicles, therefore, the income is required to be estimated @ ₹ 5,000/- per month per vehicle which comes to ₹ 3,00,000/-. Accordingly, the income of the assessee from truck hiring business is estimated at ₹ 3,00,000/- as against ₹ 3,50,000/- adopted by the A.O. Appeal of the assessee is allowed in part.
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