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TMI Blog2016 (8) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the return of income filed by the assessee was accompanied by the report of an accountant u/s.44AB of the Act. The total revenue or turnover shown for the year under appeal was Rs. 53,27,417/- and ultimately, the assessee had shown a net income of Rs. 3,08,770/- which works out to 5.80% of the gross receipts. 3. It was submitted that there were payments made by the assessee's clients directly to the security guards provided by the assessee. However, these payments made were debited by the assessee's clients to the assessee's account as if the payments were made to the assessee himself; whereas, these payments were made to the security guards directly, so in such cases and in such circumstances, the assessee neither records these re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A), the assessee preferred an appeal before the ITAT in ITA No.712/Bang/2010. It is submitted that the Department accepted the order of the CIT(A) as mentioned above and there was no appeal filed by the Department before the ITAT. The ITAT disposed of the appeal filed by the assessee by the order dated 30.08.2011. In the aforesaid order, the ITAT restored the issue to the AO with a direction to take into consideration the totality of facts and compute the net income of the assessee by observing in para (8) as under:- "8. Having heard both the parties and having considered the rival contentions and the materials on record, we find that the contention of the assessee with regard to lack of sufficient opportunity has been rightly rejected b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the ITAT that, it was not sufficient if only wages and direct expenses are considered for making the addition. In fact, this was what the CIT(A) had done while passing the appellate order dated 16.02.2010, estimating the income by applying the income by applying he GP of 38.98% on the alleged concealed turnover. The said order of the Hon'ble CIT(A) was challenged before the ITAT and the ITAT had observed that the mere allowance of wages and direct expenses was not enough. Thus the basis on which the learned CIT(A) has proceeded to estimate the income of the assessee has not been approved by the ITAT and therefore, the AO ought not to have determined the income on that basis, especially as the assessee had not claimed any expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/- for the total turnover of Rs. 53,27,417/- shown in the profit and loss account which comes to 4.18% of undisclosed turnover of Rs. 40,79,790/- can be allowed as additional expenses. Accordingly, the assessee was granted a relief of Rs. 1,70,535/-. 10. Aggrieved by the above order of CIT(Appeals), the assessee is in appeal before me on the following grounds:- "1. The orders of the authorities below in so far as it is against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned CIT[A] is not justified in modifying the original addition of Rs. 15,80,302/- made by way of estimation of the gross profit on the alleged concealed turnover of Rs. 40,79,790/- by allowi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be regarded as profit of the assessee. The net profit rate had to be adopted and once it was adopted, it could not be said that there was perversity of approach. 12. The ld. counsel for the assessee also relied on the decision of Hon'ble Bombay High Court in the case of CIT v. Hariram Bhambhani, ITA No.313 of 2013 dated 4.2.2015, wherein the Hon'ble High Court considered the following question of law formulated by the Revenue :- "Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in upholding the order of the CIT(A) in which he had directed the Assessing Officer to tax 4% net profit on accounted sales of Rs. 35 lakhs even though no evidence of unaccounted purchases/expenses against such u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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