TMI Blog2013 (4) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... ly insofar as the determination of Rs.5,00,000/- in the absence of any details furnished by the assessee and remit the matter to the assessing officer to arrive at the quantum on the basis of materials/details furnished by the assessee in this regard. Such exercise shall be done in any case within a period of two months from the date of receipt of a copy of this order. - however, no materials have been either produced before the lower authorities or before us as to the basis on which the amount of Rs.5,00,000/- has been arrived at - matter remanded back for limited purpose for determination of correct amount to be added u/s 28(iv). - Decided partly in favor of assessee. - Tax Case (Appeal) Nos.761 to 764 of 2004 - - - Dated:- 20-2-2012 - MR.D. MURUGESAN AND MR. P.P.S. JANARTHANA RAJA JJ. For Appellant: Mr. V.S. Jayakumar For Respondent: Mr. T. Ravikumar JUDGMENT (Judgment of the Court was delivered by D.MURUGESAN, J.) The assessee has filed the present tax case appeals under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai 'B' Bench dated 24.2.2004 made in I.T.A.Nos.969/Mds/2002, 970/Mds/2002, 971/Mds/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 1998-99. Aggrieved by such assessment orders, the assessee preferred appeals before the Commissioner of Income Tax (Appeals). The assessee produced two comparative cases viz., M/s J.D.Electronics, Chennai and M/s Shalini Enterprises, Chennai, where the net profit rate was assessed at less than 1 percent for the years 31st March, 1996, 31st March, 1997 31st March, 1998. The Commissioner of Income Tax (Appeals) applied a net profit rate of 3 percent to the turnover. In addition to that, the first appellate authority raised the profit by one percent for the reason that the assessee enjoyed certain benefits like long suppliers' credits and of not paying any rent for show room etc., and further increased one percent on account of interest by bank borrowals on the ground that the borrowals from banks had been diverted towards non business advances to the husband of the assessee. Ultimately, the first appellate authority arrived at the net profit rate of 5 percent of the turnover for the three assessment years as reasonable and appropriate. So far as the addition of Rs.5,00,000/- under Section 28(iv) for the assessment year 1998-99 is concerned, the first appellate authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of the assessee that the assessing officer had omitted to take into account the purchase value from the trading account produced by the assessee. On a challenge to the said order, the first appellate authority, after considering the survey report, assessment orders, remand report, miscellaneous records, confidential records, margin chart and the explanation adduced by the assessee, arrived at the net profit rate of 3 percent. To arrive at the said percentage, the first appellate authority took into consideration the following facts:- "(i) Whereas, the books for A.Y.1996-97 were impounded, it is not known as to why the books for the subsequent two years (At least the registers for sales and purchase) could not be impounded. The appellant has made some extra entries of purchase which are supported by invoices of reputed companies and cannot be easily brushed aside as non reliable. The entire purchase account however has remained beyond verification. At this stage, it is very difficult to decide whether for A.Y.1998-99, the correct and complete purchase figure was 1.34 crores as seen on the date of survey of Rs.1.59 crores as found now from the record (considering the furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appellate authority increased the profit percentage by 2 percent on the ground that the assessee was enjoying certain benefits like long suppliers credits, non-payment of rent for showroom and on account of interest through borrowals from banks. In our opinion, even though the Appellate Tribunal had concurred with the findings of the first appellate authority on consideration of the materials and records produced by the assessee and the Revenue on factual aspects, it erred in fixing the net profit percentage at 4 percent for all the three years. On the facts and circumstances of the case, we feel that a net profit percentage of 3 percent for the assessment years 1996-97, 1997-98 and 1998-99 would be proper and reasonable and accordingly modify the order of the Appellate Tribunal to this extent. 5. Question No.2: During the financial year 1997-98, the assessee with her husband had undertaken trips to Singapore, Malaysia, Bangkok and Ceylon for a period of 17 days apart from her son Mr. R. Krishamurthy who visited Singapore. It was the case of the assessee that the entire expenses relating to travel, stay, foreign currency requirement of the assessee and her husband had been met ..... X X X X Extracts X X X X X X X X Extracts X X X X
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