TMI Blog2017 (1) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... nd added the disputed amount in the hands of the assessee which is contrary to law. In appeal, Commissioner of Income Tax (Appeals) confirmed the order of the Assessing Officer without considering the submissions made by the assessee. In view of the above, the order passed by the Commissioner of Income Tax (Appeals) is deserves to be reversed. - Decided in favour of assessee - ITA No. 105/VIZ/2015 - - - Dated:- 12-1-2017 - SHRI V. DURGA RAO, HON BLE JUDICIAL MEMBER For The Assessee : Shri G.V.N. Hari Adv. Department : Shri M. Narayana Rao - DR ORDER This is an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-2, Visakhapatnam, dated 30/01/2015 for the Assessment Year 2011-12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered the profit level in the line of business and decided that 5% of purchase price is reasonable profit margin in the line of IMFL business and directed the A.O. to re-compute the profit of the assessee. The relevant portion of the order is extracted as under: 8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The A.O. estimated net profit of 20% on stock put for sale. The A.O. was of the opinion that the assessee has not maintained proper books of accounts and vouchers in support of purchases and sales. The A.O. further observed that the assessee has failed to maintain stock registers and books of accounts maintained by the assessee are not susceptible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee, relied upon the decision of ITAT, Visakhapatnam bench in the case of T. Appalaswamy Vs. ACIT in ITA No.65 66/Vizag/2012. We have gone through the case laws relied upon by the assessee in the light of the facts of the present case and finds that the coordinate bench of this Tribunal, under similar circumstances held that estimation of 5% net profit on purchases is reasonable. The relevant portion of the order is reproduced hereunder: 3. We have heard the parties, perused the orders of the revenue authorities as well as other materials on record. It is the contention of the Ld. A.R. that the estimation of profit at 16% is high and excessive considering the normal rate of profit in this line of business. Whereas, the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the coordinate bench. Therefore, we direct the A.O. to estimate the net profit of 5% on total purchases net of all deductions. Ordered accordingly. 7 . In view of the above decision of the coordinate bench of the Tribunal, I direct the A.O. to re-compute the income of the assessee at 5% of purchase price. Accordingly, this ground of appeal raised by the assessee is allowed. 8 . The second ground of appeal relating to unexplained credits of ₹3,50,000/-. During the course of assessment proceedings, the Assessing Officer noticed that there is an unexplained credits to the capital account, amounting to ₹ 3,50,000/-. The Assessing Officer asked the assessee to submit the details about unexplained credits of ₹3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Assessing Officer that this amount has been given by Shri Jagan Mohan Rao on 15/06/2010 towards investment for 10% share in the business. To that effect, he also filed a confirmation before the Assessing Officer. The Assessing Officer without calling the creditor simply disbelieved the submissions of the assessee on the ground that assessee is a proprietary concern and the return filed by the creditor was belated. Therefore, the transaction is in-genuine and the amount of ₹ 3,50,000/- added in the hands of the assessee. We find that the assessee had filed a confirmation letter along with the address of the creditor and the creditor has also filed return of income before the Assessing Officer. In this case, the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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