New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (7) TMI 11 - ITAT HYDERABAD

2016 (7) TMI 11 - ITAT HYDERABAD - TMI - Acceptance of turnover - non maintenance of books of accounts - Held that:- The assessee is dealing in two kinds of businesses, viz., retail and wholesale business. In retail business, assessee is dealing in lubricant oil, having proper vouchers from manufacturers and selling it in organised sector by maintaining proper books of account. It was audited only to the extent of retail business. Where as in the wholesale business, he had not maintained any boo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

change in the nature of business from AY 2009-10 to the current AY, we do not find any reason to adopt the rate of 3.5% on wholesale business as adopted by the AO in the previous AY 2009-10. With regard to retail business, assessee offered 3% in the AY 2009-10 and AO made some disallowance. But in the current AY 2011-12, assessee had offered only 2%. In line with the income determined in AY 2009-10, we are inclined to direct AO to assess the income of the assessee @ 3.5% of the total turnover i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssions of assessee to prove that the assessee had other source of income. Therefore, we are inclined to accept the contention of the assessee that these cash deposits were made out of the wholesale business. Moreover, the Hon’ble Jurisdictional High Court in the case of Maddi Sudarshnam Oil Mills Co.[1959 (2) TMI 27 - ANDHRA PRADESH HIGH COURT ] has observed that when books of account are rejected and income is estimated, Assessing Officer is not entitled to make further addition basing on the s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

essee is an individual filed his return of income on 17/09/12 admitting total income of ₹ 4,74,280/-. This case is selected for scrutiny. During assessment proceedings, assessee was asked to explain the cash deposits reported in AIR information for ₹ 47,09,460/-. In response, assessee submitted that he had two kinds of turnover, retail business of ₹ 2,90,60,566/- dealing in organised sector and wholesale business of ₹ 64,46,043/- dealing in unorganised sector. He has repo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e assessee's submissions have been carefully considered. It is pertinent to mention here that the assessee has not disclosed the bank account maintained with State Bank of Hyderabad, Dabeerpura Branch, Hyderabad, i.e. S.B. Account No.62020094110. Copy of the bank statement was obtained by the undersigned directly from the bank. When the assessee was questioned about the transactions in the bank account, he could not explain the same. A show cause letter was issued to the assessee as to why t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

- and the vouchers are also self-made vouchers. Even the books of account produced in respect of the turnover of ₹ 2,90,60,566/- are not complete. As the turnover of the assessee exceeds ₹ 40 lakhs, he has to get his accounts in respect of the total turnover i.e. ₹ 3,55,06,609/- (Rs.2,90,60,566 + ₹ 64,46,043) audited by an accountant before the specified date and furnish a report of such audit as per the provisions of Section 44AB of the Income Tax Act, 1961. However, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ating the income @ 10% on the total turnover of ₹ 3,55,06,609/-, which works out to ₹ 35,50,660/-. In respect of bank transactions in the SB Account No.62020094110 with State Bank of Hyderabad, Dabeerpura Branch, Hyderabad, in the absence of books of account and relevant information to verify the transactions made by the assessee and the explanation offered by the assessee is not satisfactory, the total amount of the cash deposits of ₹ 47,09,460/- in the bank account of the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 3.55 crores are in cash and the purchases were supported by only self-made vouchers, he considered it appropriate to estimate the income at 5% of total turnover of ₹ 3.55 crores. 4. Aggrieved with the above order, both assessee and revenue are in appeal before us. 5. Assessee has raised the following grounds of appeal: 1. The order of the learned Commissioner of Income Tax (Appeals) is against the law, weight of evidence and probabilities of case. 2. The learned Commissioner of In .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e total turnover of ₹ 3,55,06,609/- whereas no defects were pointed out by the Assessing Officer in respect of turnover of ₹ 2,90,60,566/- and further erred in assuming that the purchases are supported by only self vouchers in respect of en tire turnover. 6. Revenue has raised the following grounds of appeal. 1. Ld.C1T(A) erred on both law and facts of the case. 2. Ld.CIT(A) erred in deleting the addition of ₹ 47,09,460/- made u/s 69A of the Act, without considering the fact th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sing officer, without bringing any comparable cases on record. 7. Ld. AR submitted that assessee is in the business of trading of lubricant oils, made sale of ₹ 2,90,60,566/-. Proper books were maintained during this AY and audited as per the provisions of section 44AB. In addition to this, assessee also made sale of loose burnt oil to the extent of ₹ 64,46,043/-. It is submitted that purchase of these oils are from unorganised sector in cash. The sales are supported with deposits in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

5 crores are in cash and the purchases were supported by only self-made vouchers. He submitted that the observations of the CIT(A) are not true. He submitted that the assessee had maintained proper vouchers of sales and purchases in the retail business and only wholesale business, the self-made vouchers were made for purchases and sales. He also submitted that the assessee had offered the books of account for audit as per section 44AB and got it audited (refer pages 71-79 of the paper book). 7.2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ess, the contention of the assessee was rejected by the CIT(A). 7.3 Ld. AR also submitted that there is no change in the nature of business with regard to sales and purchases. Referring to the principles of consistency, ld. AR pleaded to adopt the GP @ 3.5% on ₹ 64,46,043/- of the wholesale business of this AY. For this proposition, ld. AR relied on the judgment of the Hon ble Supreme Court in the case of Smt. Radha Soami Satsang Saomi Bagh Vs. CIT, [1992] 193 ITR 321. 8. Ld. DR, on the ot .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ks of account, and all the vouchers relating to purchase and sales were self-made. There is no dispute with regard to the turnover. AO and CIT(A) rejected the books of both the businesses and preferred to estimate the income. Ld. AR submitted before us clearly that the retail business was audited by a Chartered Accountant as per the provisions of section 44AB. The issue before us is relating to wholesale business, which was not audited and only self-made vouchers are available. Since there is no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version