2023 (9) TMI 829 - ITAT VISAKHAPATNAM

Revision u/s 263 - Assessee had deposited the cash out of cash sales of fish trading - As per CIT AO has not properly examined and simply estimated the profit at 0.75% without any basis - HELD THAT:- AO issued notices and in response to the said show cause notice, he explained that since the fish is highly perishable commodity, it has to be marketed as quickly as possible and that the commission changes from person to person depending upon the bargain and therefore requested to accept the commission admitted in the return filed taking into account the expenses to be incurred in deriving the commission.

Based on these findings, the AO estimated the net profit at 0.75% of gross receipts. After perusal of the assessment order, the assessing officer himself admitted that the assessee has not furnished any books of accounts, proof of evidence in the form of bills /vouchers for total quantity of fish sold to the traders through mediation during the year to ascertain actual quantity of fish sold and also price per kg. and commission derived etc.

Therefore, in the absence of such bills, the AO has estimated the profit @0.75%, but he has not verified the sources for cash deposits. Therefore, we are of the view that the Ld.Pr.CIT has rightly set aside the order passed by the AO, saying that it is erroneous and prejudicial to the interest of the revenue. Therefore, we uphold the order passed by the Ld. Pr. CIT u/s 263, hence, the grounds raised by the assessee are dismissed.