TMI Blog2015 (10) TMI 1485X X X X Extracts X X X X X X X X Extracts X X X X ..... arrive at the profit of 20% on food sales. He simply estimated at 20% without there being any basis. Considering the facts of the business and location of the appellant Bar and Restaurant in Hyderabad, we are of the opinion that income can be estimated at 10% of the food sales. Accordingly, assessee has gets relief. A.O. is directed to adopt income of ₹ 1,96,400 as against ₹ 3,92,800 added by him in the order. Addition of ₹ 24 lakhs as income offered from Bar and Restaurant by the assessee's partner - Held that:- Except the statement given by the partner during the course of survey, there is no other evidence establishing that assessee could earn that much income from the business. During the survey no incriminating ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that there is no basis for making an addition of ₹ 24 lakhs solely on the basis of statement. In view of this, we have no hesitation in deleting the same. A.O. is directed to re-work out the incomes accordingly. - Decided in favour of assessee in part by way of remand. - ITA No.1744/Hyd/2014 - - - Dated:- 31-3-2015 - B. Ramakotaiah, AM And Saktijit Dey, JM,JJ. For the Petitioner : Mr T Chaitanya Kumar For the Respondent : Mr Rajat Mitra ORDER Per B Ramakotaiah, A.M. This appeal by assessee is against the order of Ld. CIT(A)-III, Hyderabad dated 20th September, 2014. 2. Briefly stated, assessee firm is engaged in the business of running a Bar and Restaurant and filed its return of income declari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent relating to addition where the assessment in that regard was made on agreed basis. Ld. CIT(A) took note of various decisions on the issue and after analyzing, vide paras 4 and 5 came to the conclusion that appeal does not lie where assessment was made on agreed basis, applying ratio of decision of Allahabad High Court in the case of Sterling Machine Tools vs. CIT 123 ITR 181. 4. Contesting the above order of the Ld. CIT(A), it was submitted by the Ld. Counsel for the assessee that CIT(A) has wrongly considered that additions were agreed, whereas assessee has not agreed for anything except for estimation of profit on sale of liquor at 5%. He referred to the letter filed before the ITO placed at page-7 of the paper book to submit that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that assessee has voluntarily admitted higher income and therefore, was prevented in enquiring in other matters. 6. We have considered the issue and examined the statements placed on record as well as the P L account and other documents. As seen from the orders, except admitting income at 5% on the liquor sales there was no other agreed addition as stated by the Ld. CIT(A) in the order. Even though assessee has contested the income on sale of liquor at 5%, we are of the opinion that this estimation is reasonable considering the facts of the case. However, the A.O. is directed to correct the arithmetic error that occurred in the order. 7. Coming to the estimation of income on food items at 20%, we are of the opinion that A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t asking the assessee whether he want to state any thing further. At that point of time, assessee's partner seems to have declared additional ₹ 24 lakhs in order to settle with the Income Tax Department. As can be seen from the statement recorded, there is no indication that this additional income is because of any investment/profits of the business. Moreover, as pointed out by the Ld. Counsel, assessee did retract statement immediately after the survey and so statement cannot be considered as a basis for making the addition. It was an established law that addition cannot be made solely on the basis of statement given by the partner of a firm. Hon'ble Supreme Court in the case of CIT vs. Khaderkhan Son 352 ITR 480 has uphe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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