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2020 (10) TMI 282 - AT - Income TaxEstimation of income - NP determination - assessee has declared the Net Profit on presumptive basis u/s 44AD of the IT Act @ 8% - HELD THAT:- We find that since the assessee has already explained the source of amount of turnover declared by the assessee, salary income and loans from the relatives, then the action of the AO by taking the entire bank amount as turnover of the assessee is contrary to the facts. When the assessee has discharged his onus of explaining the source of deposit in the bank account and the AO has failed to conduct any further enquiry or bring any contrary material on record to disprove the explanation and evidence produced by the assessee, the addition made by the AO is not sustainable. Accordingly, the said addition made by the AO on account of turnover of the assessee is deleted. Net profit rate applied by the AO at 8%, since the main issue of enhancing the turnover of the assessee is decided in favour of the assessee, therefore, this issue becomes infructuous. We may clarify that the AO has not enhanced the NP rate but applied the same NP rate which was declared by the assessee in the return of income. Therefore, the assessee has no merit on this issue. Appeal of the assessee is allowed.
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