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Showing 121 to 140 of 1238 Records
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2014 (5) TMI 1121
Jallikattu, Bullock-cart Race and such events per se violate Sections 3, 11(1)(a) and 11(1)(m)(ii) of PCA Act - whether Bulls cannot be used as performing animals, either for the Jallikattu events or Bullock - cart Races in the State of Tamil Nadu, Maharashtra or elsewhere in the country - Held that:- Taming of animal for domestic use and taming of animal for exhibition or entertainment are entirely different. Section 2(c) of TNRJ Act speaks of ‘taming of bulls’ which is inconsistent and contrary to the provisions of Chapter V of PCA Act. Sections 4(vii), (viii) and 5 (viii) speak of Bull tamers. Bull tamers, therefore, tame the bulls at the arena, thereby causing strain, stress, inflict pain and suffering, which PCA Act wants to prevent under Section 11 of the Act. Taming of bulls in arena during Jallikattu, as per the State Act, is not for the well-being of the animal and causes the unnecessary pain and suffering, that is exactly what the Central Act (PCA Act) wants to prevent for the well-being and welfare of animals, which is also against the basic natural instinct of the bulls.
PCA Act, especially Section 3, coupled with Section 11(1)(m)(ii), as already stated, makes an offence, if any person solely with a view to provide entertainment, incites any animal to fight. Fight can be with an animal or a human being. Section 5 of TNRJ Act envisages a fight between a Bull and Bull tamers, that is, Bull tamer has to fight with the bull and tame it. Such fight is prohibited under Section 11(1)(m)(ii) of PCA Act read with Section 3 of the Act. Hence, there is inconsistency between Section 5 of TNRJ Act and Section 11(1)(m)(ii) of PCA Act.
TNRJ Act, in its Objects and Reasons, speaks of ancient culture and tradition and also safety of animals, participants and spectators. PCA Act was enacted at a time when it was noticed that in order to reap maximum gains, the animals were being exploited by human beings, by using coercive methods and by inflicting unnecessary pain. PCA Act was, therefore, passed to prevent infliction of unnecessary pain or suffering and for the well-being and welfare of the animals and to preserve the natural instinct of the animal. Over-powering the performing animal was never in the contemplation of the PCA Act and, in fact, under Section 3 of the PCA Act, a statutory duty has been cast on the person who is in-charge or care of the animal to ensure the well-being of such animal and to prevent infliction on the animal of unnecessary pain or suffering. PCA Act, therefore, cast not only duties on human beings, but also confer corresponding rights on animals, which is being taken away by the State Act (TNRJ Act) by conferring rights on the organizers and Bull tamers, to conduct Jallikattu, which is inconsistent and in direct collision with Section 3, Section 11(1)(a), 11(1)(m)(ii) and Section 22 of the PCA Act read with Articles 51A(g) & (h) of the Constitution and hence repugnant to the PCA Act, which is a welfare legislation and hence declared unconstitutional and void, being violative of Article 254(1) of the Constitution of India.
We, therefore, hold that AWBI is right in its stand that Jallikattu, Bullock-cart Race and such events per se violate Sections 3, 11(1)(a) and 11(1)(m)(ii) of PCA Act and hence we uphold the notification dated 11.7.2011 issued by the Central Government, consequently, Bulls cannot be used as performing animals, either for the Jallikattu events or Bullock- cart Races in the State of Tamil Nadu, Maharashtra or elsewhere in the country. We, therefore, make the following declarations and directions:
1) We declare that the rights guaranteed to the Bulls under Sections 3 and 11 of PCA Act read with Articles 51A(g) & (h) are cannot be taken away or curtailed, except under Sections 11(3) and 28 of PCA Act.
2) We declare that the five freedoms, referred to earlier be read into Sections 3 and 11 of PCA Act, be protected and safeguarded by the States, Central Government, Union Territories (in short “Governments”), MoEF and AWBI.
3) AWBI and Governments are directed to take appropriate steps to see that the persons-in-charge or care of animals, take reasonable measures to ensure the well-being of animals.
4) AWBI and Governments are directed to take steps to prevent the infliction of unnecessary pain or suffering on the animals, since their rights have been statutorily protected under Sections 3 and 11 of PCA Act.
5) AWBI is also directed to ensure that the provisions of Section 11(1)(m)(ii) scrupulously followed, meaning thereby, that the person-in-charge or care of the animal shall not incite any animal to fight against a human being or another animal.
6) AWBI and the Governments would also see that even in cases where Section 11(3) is involved, the animals be not put to unnecessary pain and suffering and adequate and scientific methods be adopted to achieve the same.
7) AWBI and the Governments should take steps to impart education in relation to human treatment of animals in accordance with Section 9(k) inculcating the spirit of Articles 51A(g) & (h) of the Constitution.
8) Parliament is expected to make proper amendment of the PCA Act to provide an effective deterrent to achieve the object and purpose of the Act and for violation of Section 11, adequate penalties and punishments should be imposed.
9) Parliament, it is expected, would elevate rights of animals to that of constitutional rights, as done by many of the countries around the world, so as to protect their dignity and honour.
10) The Governments would see that if the provisions of the PCA Act and the declarations and the directions issued by this Court are not properly and effectively complied with, disciplinary action be taken against the erring officials so that the purpose and object of PCA Act could be achieved.
11) TNRJ Act is found repugnant to PCA Act, which is a welfare legislation, hence held constitutionally void, being violative or Article 254(1) of the Constitution of India.
12) AWBI is directed to take effective and speedy steps to implement the provisions of PCA Act in consultation with SPCA and make periodical reports to the Governments and if any violation is noticed, the Governments should take steps to remedy the same, including appropriate follow-up action.
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2014 (5) TMI 1120
Recruitment to Service - rule of quota and rota - Held that:- The Court made it clear that it was not laying down that rule of quota and rota cannot go exist. Service rules, in a particular case may specifically provide the co-existence of quota and rota. There may also be a situation where service rules be interpreted as such. That is a very important comment made by the Constitution Bench after taking note of the ratio in Paramjit Singh’s case[1979 (3) TMI 207 - SUPREME COURT]. It is specifically noted how the Court on harmonious reading of Rules 3,4,6,8 and 10 of these 1959 Rules had come to the conclusion that quota rule was operative both at the time of initial appointment and at the time of confirmation. After taking note of this ratio on the harmonious interpretation of the Rules in question, rather than stating that such an interpretation was impermissible or wrongly given, the Constitution Bench clarifies that there may be circumstances where such an interpretation would be permissible and validity of the rules would be tested in the total setting of facts.
It needs to be highlighted at this stage that having regard to the overall circumstances and the factual position which prevailed while deciding Paramjit Singh’s case, the Court held that in order to save Rule 10 from the vice of arbitrariness, the only interpretation which could be given was to hold that the quota rule would apply both at the time of recruitment and at the time of confirmation. Detailed reasons are given justifying the said line of action taken by the Court and that portion of the judgment has already been extracted. In the beginning, not only this, even when the Review Petition was filed the Court made it clear that there was no ambiguity in the judgment. It was also made clear that what the Court meant was that quota should be co-related to the vacancies which are to be filled in. Who retired and from what source he was recruited may not be very relevant because retirement from service may not follow the quota rule. A roster had to be introduced which was to continue while giving confirmation. Introduction of roster only postulates ascertainment of available number of vacancies and proceeding to make recruitment keeping in view of the quota.
We, accordingly, hold that the approach of the High Court in following the dicta laid down in Paramjit Singh was perfectly justified. Finding no merit in these appeals, the same are hereby dismissed. No costs.
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2014 (5) TMI 1119
Interest earned on fixed deposits - "income from other sources" OR "business income" - nature of income - Held that:- The F.D.R. have not been received by Assessee for the purpose of investing money or otherwise, but it is a part and parcel of his regular business activities in which he has to furnish security to the Department to obtain civil contracts and if an interest has been earned thereon, in my view, it will qualify to be an "income on business" and not as "income from other sources".
Also F.D.R. were purchased for security purposes for obtaining the contracts and the Court observed that it is in connection with the business activities of Assessee, which was the view taken by Commissioner also so as to hold that income earned on such F.D.R. is to be treated as "business income" and not as "income from other sources".
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2014 (5) TMI 1118
Sale of land - Addition on cash deposits in the State Bank of India and Axis Bank - Held that:- The only inference which can be drawn is that the deposit of cash made by the appellant in his saving bank accounts maintained with the Axis Bank and with the SBI Bank had nothing to do with the facts of sale of land by his father and his uncles. It is also endorsed by the fact that there was no such deposit or withdrawal from the bank accounts maintained by the appellant. As far as, reliance placed on the statement of the father of the assessee and the copy of the affidavit of the father and of uncles of the appellant, it is noted that in the statement as well as in the affidavit, it is stated that the advance of ₹ 60 lac was received on 02.08.2008. Further amount of ₹ 25 lac was received on 30.04.2009 and further ₹ 15 lac on 25.06.2009 whereas, the first agreement dated 02.08.2008 was cancelled on 30.04.2009 and the entire amount of ₹ 60 lac was stated to be returned.
Fresh agreement was carried out and advance of ₹ 85 lac was received, which was also canceled later on and the entire amount of advance of ₹ 85 lakh was also returned on the same date. The facts given in the affidavit and in the statement are, as such, contradictory. The facts stated in the affidavits, relied upon by the appellant are, as such, not in consonance with the agreement and hence are not reliable.
In view of the fact discussed above, it is noted that the appellant failed to explain the source of deposit of cash in the saving bank accounts maintained with the Axis Bank and the SBI Bank and hence addition thereof made by the AO is hereby confirmed. Various ground of appeal taken by the appellant are, as such, rejected.
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2014 (5) TMI 1117
Cenvat demand - credit availed in respect of fibre glass, received in the appellant factory - Held that:- no justifiable reason found for denial of credit or for imposition of penalty inasmuch as fibre glass was cleared on payment of excess duty by reversing more credit. As such, the entire credit availed by the appellant stand reversed by them. The entire situation is revenue neutral and consequent confirmation of duty in respect of the credit so availed is not justified. - Decided in favour of appellant
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2014 (5) TMI 1116
Demand - clandestine removal of final product - recovery of commercial invoices in respect of duty paid goods which were rejected by their customer and were kept outside the factory and were diverted from their only - Held that:- it is found that having recovered commercial invoices, the Revenue did not make further investigation as regards the identity of the buyers and the transporter etc. so as to corroborate the charge of clandestine removal. No efforts were made to find out the source of the raw material and no statements of the production people were recorded. It is well settled law that charges of clandestine removal cannot be upheld on the basis of non-corroborative evidences. Inasmuch as in the present case there is neither any corroboration to the charge of clandestine removal under the cover of commercial invoices nor any independent evidence produced on record. Further, as the plea of the appellant as regards raising of commercial invoices stands accepted in respect of some of the returned goods, I am of the view that the charges of clandestine removal cannot be upheld against the appellant. - Decided in favour of appellant with consequential relief
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2014 (5) TMI 1115
Eligibility for exemption under section 11 - receipt received from Mahalaxmi Hospitality, Mahalaxmi Hotel & Resort and Mahalaxmi Food Link for Purposes of playing cards and also having Permit Room Bar and Restaurant for catering and soft drinks and hiring income from Marriage Hall/ground - Held that:- The AO has given a categorical finding that though the membership of the club is open to public but it has been restricted in many ways and it is not easy to get membership of the club even for the persons who count in the society. Even the membership is offered on payment of very high premium. High class premium services, such as facility of liquor bar, playing cards, restaurant, marriage hall, catering services etc. have been provided to the members, which cannot be said to constitute any charitable activity. Services can be availed for consideration only by members who constitute high class, influential and rich persons that too on payment of high premium for getting membership of the club. Though the assessee club is also offering the facility of sports to its members that itself, cannot partake the character of charitable activity. It is not the case of the assessee trust that such sports activities are provided or have resulted into any benefit to the public at large or any section of the society. The sports activities accompanied by facilities like liquor bar, playing cards, restaurant, marriage hall, catering services etc. limited to a certain group of persons i.e. members of the club cannot be said to be a charitable activity from which any benefit is derived by the public or section of the public rather the benefits are limited to high and rich distinguishable group of persons i.e. members of the club only. There is no element of charity involved in such an activity rather the activities of the club are meant for leisure and pleasure of the members of the club and the membership has been restricted to certain individuals not to any section of the society.
We therefore do not find any infirmity in the order of the AO in holding that the activities of the assessee trust do not fall in the definition of charitable purpose as defined under section 2(15) of the Act.
Benefit of mutuality - We may point out that if the services of restaurant, bar room, swimming-pool etc. are restricted to members or their family members or guests only, then the income from those services cannot be said to be business income of the society and the benefit of mutuality will be available to the assessee in relation to such facilities/services. However, the income which has been earned by the assessee by providing facilities to non members is required to be treated as business income of the assessee. We accordingly restore the matter back to the file of the AO to distinguish the income from facilities/services which have been offered to non members as compared to the income relating to the services/facilities which have been provided to members of the club. It will not affect the concept of mutuality or benefit of mutuality even if the said services are offered by the club by way of providing contracts etc. to private parties on commission basis or rent basis, for the benefit of members/family members or guests of the club members only.
Since the grounds relating to above claim of the assessee were not adjudicated by the ld. CIT(A) but were dismissed being rendered infructuous and since we have restored the matter to AO to distinguish the income earned from non members, hence we direct the AO to consider the above claim of depreciation etc. of the assessee accordingly as per law. - Decided in favour of revenue for statistical purposes.
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2014 (5) TMI 1114
Cenvat Credit - Entitlement to avail the Cenvat credit of service tax paid on the construction activities of the factory and its parts, prior to 1.4.2011 - Held that:- Availability of Cenvat credit of service tax paid on repair and maintenance of the building/plant/road etc. I find that the definition of input service as contained in Rule 2(l) specifically includes services used in relation to modernisation, renovation or repair of a factory. The said definition was amended with effect from 1.4.2011 wherein construction of the factory was excluded. As there is no exclusion in respect of the services relatable to renovation or repair, find no reasons to hold that such services were not cenvatable. Accordingly, the Revenue's appeal on the said ground is also not acceptable.
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2014 (5) TMI 1113
Status of the assessee - treated as AJP as declared by the assessee or AOP as proposed by the AO - entitlement to exemption u/s. 10(23C)(iiiad) - whether the assessee was entitled to exemption u/s. 11? - Held that:- We find that the issues raised by the revenue in its ground of appeal have all been dealt with by the Hon’ble High Court of Karnataka in the assessee’s own case viz., Children Education Society, (2013 (7) TMI 519 - KARNATAKA HIGH COURT ). On the question of status of the assessee, the Hon’ble High Court has held that the same has to be adopted as AJP. On the question of exemption u/s. 10(23C)(iiiad) of the Act, the Hon’ble High Court has held that the assessee was entitled to the said exemption and that the receipts of each of the educational institutions have to be considered separately and not by aggregation. With regard to the receipts by way of building fund and infrastructure development fund, the Hon’ble High court remanded the same to the Assessing Officer for fresh consideration to look into the ledger books and other accounts showing the receipts on account of building fund and infrastructure fund and its utilization for the purpose of construction and on that basis, pass suitable orders.
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2014 (5) TMI 1112
Income assessed u/s. 172(4) in the hands of the assessee as an agent - income accrued in India - DTAA of India Cyprus - interpretation of 'Effective Management' - Held that:- The authorities below have taxed income in the hands of Shaan as an agent of Glendive. If in their opinion Glendive may be bogus entity interposed in between to take advantage of Cyprus treaty, then it is not the income of Glendive but that of Aquavita. On one side, they are taxing the income in the hands of Glendive and on the other hand, they hold that Glendive is only a paper company. If in their opinion it is the income of Glendive, in that event, it is to be noted that Glendive does not have any establishment outside Cyprus. Accordingly, the income arises to it in Cyprus only.
It is not the case of the authorities below that Glendive has any establishment outside Cyprus. According to authorities below, Glendive is just a paper company and has been interposed in the transaction as a charterer. In that event, the income would accrue to Aquavita and not Glendive. This approach of authorities below is not justified. The other reasoning given by authorities below is that the effective management of Glendive cannot be in Cyprus because it has no staff, big office establishment in Cyprus and it is a one person company. He has relied on the OECD commentary which explains the words 'Effective Management'. The Indo Cyprus Treaty defines the words 'Effective Management' in Article 8 itself.
While other treaties like the one's with Mauritius, Poland, Netherlands do not define the words 'Effective Management' in the Article 8 thereof. Thus, for interpreting, these treaties, reliance may be placed on the OECD Commentary but so far as the Cyprus Treaty is concerned, there is no reason to rely upon to OECD Commentary because Article 8 itself has defines the term. Hence, in our case, when Article 8 of Cyprus Treaty explains clearly the word 'Effective Management', there is no need to refer to OECD Commentary or other sources for the meaning of these words. In view of the above, the CIT(A) erred in holding that the income of Glendive was taxable u/s 172(4) in the hands of Shaan Marine as an agent and the treaty benefits were not available to Glendive. - Decided in favour of assessee
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2014 (5) TMI 1111
Addition made on the basis of statement made during the course of survey u/s.133A - receipt of money in cash - Held that:- As evident from the observation of the ld.CIT(A) that the AO had not confronted the assessee regarding receipt of money in cash and merely assumed that the assessee has received cash from each and every purchaser.
Undisputedly, the AO has not made enquiry from the other purchasers and no material has been placed on record that money was received in cash except that statement was made by one of the Directors of the company during the course of survey. The ld.CIT(A) has held that the retraction letter of the assessee is not valid without giving any reason. We also find that the ld.CIT(A) has not taken into account the decision of CIT vs. Khader Khan Son reported at (2007 (7) TMI 182 - MADRAS HIGH COURT) and the appeal filed by the Revenue before the Hon’ble Apex Court [2013 (6) TMI 305 - SUPREME COURT] . Therefore, ld.CIT(A) was not justified in confirming the action of the AO and moreover the Revenue has not placed any independent material on record to substantiate the addition. Under these facts, the addition to the extent of ₹ 2,95,000/- only (Rs.4,75,000 – ₹ 1,80,000) is hereby sustained and the AO is directed to delete the balance amount of ₹ 29,75,000/-. - Decided partly in favour of assessee.
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2014 (5) TMI 1110
Problem with regard to the water level of Mullaperiyar dam after it had solved on 27.02.2006 (Mullaperiyar Environmental Protection Forum) because the Kerala State Legislature enacted the law immediately thereafter fixing and limiting Full Reservoir Level (FRL) to 136 ft - Held that:- Tamil Nadu is entitled to the reliefs as prayed in para 40 (i) and (ii) of the suit. Consequently, it is declared that the Kerala Irrigation and Water Conservation (Amendment) Act, 2006 passed by the Kerala legislature is unconstitutional in its application to and effect on the Mullaperiyar dam. The 1st defendant-State of Kerala-is restrained by a decree of permanent injunction from applying and enforcing the impugned legislation or in any manner interfering with or obstructing the State of Tamil Nadu from increasing the water level to 142 ft. and from carrying out the repair works as per the judgment of this Court dated 27.2.2006 in W.P.(C) No. 386/2001 with connected matters.
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2014 (5) TMI 1109
Admission to educational institutions including private educational institutions - Validity of clause (5) of Article 15 of the Constitution inserted by the Constitution (Ninety-third Amendment) Act, 2005 with effect from 20.01.2006 and on the validity of Article 21A of the Constitution inserted by the Constitution (Eighty-Sixth Amendment) Act, 2002 with effect from 01.04.2010 - Held that:- Constitution (Ninety third Amendment) Act, 2005 inserting clause (5) of Article 15 of the Constitution and the Constitution (Eighty-Sixth Amendment) Act, 2002 inserting Article 21A of the Constitution do not alter the basic structure or framework of the Constitution and are constitutionally valid. We also hold that the 2009 Act is not ultra vires Article 19(1)(g) of the Constitution. We, however, hold that the 2009 Act insofar as it applies to minority schools, aided or unaided, covered under clause (1) of Article 30 of the Constitution is ultra vires the Constitution. Accordingly, Writ Petition filed on behalf of Muslim Minority Schools Managers’ Association is allowed and Writ Petition filed on behalf of non-minority private unaided educational institutions are dismissed.
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2014 (5) TMI 1108
Denial of refund of Cenvat credit - availed on input services - Event management servicesm, real estate agent service, consultant service, tour operator service and travel agent service - RFefund claimed on the ground that credit could not be utilized because the output service is exported and accumulated CENVAT credit is to be refunded under Rule 5 of CENVAT Credit Rules 2004 under Notification No. 5/06 NT dated 14.03.2006.
Held that:- appellant has made out a complete case for eligibility for refund in respect of service tax paid on all the above input services. However, the matter has to be remanded for the purpose of verification of documents and records and sanction of refund and payment of the amount to the appellant. - Appeal allowed by way of remand
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2014 (5) TMI 1107
Waiver of pre-deposit - Whether the figure mentioned in the order is correct or not - while quantifying the amount of waiver of pre-deposit, the learned Tribunal has taken a mistaken and incorrect figure - High Court held that to make the amount of deposit in a round figure, it would be ₹ 3 crores instead of ₹ 3.4 crores. Therefore, learned Tribunal has rightly exercised its discretion in asking to make the deposit reported in [2014 (3) TMI 1051 - ANDHRA PRADESH HIGH COURT] - Apex Court dismissed the special leave petition for no reason to interfere
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2014 (5) TMI 1106
Transfer pricing adjustment - Held that:- Appeal admitted on the following substantial question of law:-
Whether on the facts and in the circumstance of the case and in law, the Tribunal was justified in confirming the order of CIT (Appeals) in deleting the addition of ₹ 61,84,483/- made under Section 92CA(3) by the Assessing Officer?”
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2014 (5) TMI 1105
Suspension of CHA licence - Regulation 19 of the CBLR, 2013 - Petitioner contended that in compliance with Regulation 19(2), a hearing was given after the suspension order within the time specified but, no order has been made as yet, therefore, entire suspension order vitiate also second part of Regulation 19(2) prescribes a further period of 15 days within which the order is to be made either revoking or confirming the suspension, has to be construed as casting a mandate.
Held that:- in the absence of any indication, within the Regulation, as to the consequence of not passing an order within the time stipulated, the Court is unpersuaded with the petitioner’s arguments that the discretion to pass the order within fifteen days of hearing is, in fact, a mandatory requirement. At the same time, this Court is not oblivious of the fact that more than five months have elapsed since the hearing was given on 31-12-2013. In these circumstances, to balance the equities, it would be appropriate that the Commissioner grants a fresh hearing to the petitioner or his representative as the case may be, within a week from today and thereafter pass orders under Regulation 19 either revoking or confirming the suspension. - Petition disposed of
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2014 (5) TMI 1104
Adhoc addition being 25% of the total interest claimed by the assessee as deduction - Held that:- It is not in dispute that the assessee has obtained loan for business purpose and utilised the same for the purpose of business. Interest paid by the assessee on such loan was allowed as deduction from year to year. Therefore there is no dispute with regard to the fact that the expenditure is wholly and exclusively incurred for the purpose of business. The assessee is at liberty to arrange its affairs in such a way which would strengthen business relations and the Assessing Officer cannot put himself in the shoes of the businessman to decide as to what would be the course of action that needs to be taken in a given situation. In the instant case the assessee explained the reasons for permitting group concerns long term credits. Merely because the Assessing Officer views its otherwise, expenditure incurred for the purpose of business cannot be disallowed, particularly in the light of the decision of Hon'ble Apex Court in the case S.A. Builders Ltd. (2006 (12) TMI 82 - SUPREME COURT ).
The tax authorities have not made out any case for disallowance of 25% of the total claim. The Assessing Officer is directed to allow the claim in its entirety - Decided in favour of assessee
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2014 (5) TMI 1103
Power of Settlement Commission to grant immunity from prosecution and penalty - Held that:- It is true that ordinarily the settlement comes as a package and composite tax statement is either to be accepted or rejected. The settlement tax cannot be accepted only in part. Where, however, the settlement is under different heads, which are segregable there is no reason why the part of the settlement which is legally unsustainable cannot be set aside, if the same is segregable. In the instant case, the Settlement Commission, has allowed the demand of the department in full in respect of Central Excise duty, Education Cess, interest and even penalty and given the writ petitioners relief only from prosecution. The penalty being segregable and legally unsustainable, the same is liable to be set aside by this Court.
For the reasons discussed above, the writ petition is allowed. The impugned Final Order passed by the Customs and Excise Settlement Commissioner, Additional Bench, Kolkata, is set aside to the extent it purports to levy penalty on the petitioners. The concerned respondents shall forthwith, and in any case within two months from the date of receipt of a certified copy of this order, refund the penalty amount paid by and/or realized from the respective writ petitioners.
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2014 (5) TMI 1102
Disallowance out of purchases - difference found between the credit entry in the bank account and sale proceeds - Held that:- It is true that without purchase no sale can be executed. The appellant had not produced the books of accounts before the AO, however made available copy of bank account to the AO on which addition had been made. The appellant had shown net profit on sale of ₹ 32.01 lac @ 4.08%. The AO made addition without comparing any case in the similar line of business @ 25% and disallowed the expenses on estimated basis. He made addition on account of difference found between the credit entry in the bank account and sale proceeds shown by the assessee at ₹ 17,31,629/-. The AO has not brought any material on record that the assessee had made purchases outside the books of accounts. The sales included the cost of purchase plus expenses and net profit.
Therefore, the whole sale proceeds cannot be added as income of the assessee. As suggested by the ld.counsel for the assessee that 5% on net profit of total credit entries, i.e. ₹ 49,32,992/- be taken as income of the assessee which comes to ₹ 2,46,649/-. The appellant had already disclosed income at ₹ 1,30,757/- and returned income at ₹ 95,114/-. After reducing the amount of returned income, the net addition is worked out at ₹ 1,15,892/-; whereas as per the peak theory of investment, the maximum balance was at ₹ 2,05,643/-. The appellant had not established that all the cash deposited in the bank account came from the sale proceeds of the assessee. In the absence of complete books of accounts, we estimate the assessee’s income for the year under consideration at ₹ 2.05 lacs on the basis of ‘peak’ plus ‘income’ disclosed by the assessee in the return. When assessee’s income has been estimated on the basis of facts, no other addition remained to be justified as held by the various courts on this issue. - Decided partly in favour of assessee
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