TMI Blog2017 (8) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to prove the creditworthiness of the creditor. Therefore, find no infirmity in the order of the ld. CIT(A). Thus, this ground of appeal raised by the assessee is dismissed. With regard to creditor - G. Jagannadam, he deposed that he advanced the impugned amount in cash for his brother’s business, out of HUF agricultural income and savings. The assessee has not filed any evidence with reference to the said creditor G. Jagannadam neither before the Assessing Officer nor before the ld. CIT(A). Therefore, ld.CIT(A) confirmed the order of the Assessing Officer by observing that the assessee failed to prove the creditworthiness of the creditor. Thus find no infirmity in the order passed by the ld. CIT(A). Thus, this ground of appeal raised by the assessee is dismissed. With regard to claim of agricultural income from HUF Assessing Officer took a view that agricultural income to the tune of ₹ 55,000/- is acceptable. However, ld. CIT(A) has enhanced the agricultural income to the tune of ₹ 1 lakh in the individual status as available to explain the source for the initial expenditure/investment. Thus find that ld. CIT(A) has taken a reasonable view in calculating the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the issue involved in this appeal is squarely covered by the decision of the coordinate bench of this Tribunal where the Tribunal has scaled down the estimation of profit from 10% to 5% in the case of Tangudu Jogisetty in ITA No.96/Vizag/2016 by order dated 2.6.2016. 5. On the other hand, the Ld. D.R. strongly supported the orders passed by the authorities below. 6 . I have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The issue involved in this appeal is estimation of profit in respect of IMFL business carried by the assessee. In this respect, the coordinate bench of the Tribunal in the case of Tangudu Jogisetty (supra) has considered 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imation of profit at 16% is high and excessive considering the normal rate of profit in this line of business. Whereas, the Ld. D.R. supported the order of the CIT(A). Having considered the submissions of the assessee, we are of the view that the issue is no more res integra in view of a series of decisions of the ITAT Hyderabad bench in similar cases. The coordinate bench in case of ITA No.127/Hyd/12 and others dated 18.05.2012 as well as a number of other cases have held that profit in case of business in Indian made foreign liquor has to be estimated at 5% of the purchases made by the assessee. Therefore, following the decision of the ITAT Hyderabad bench, we set aside the order of the CIT(A) and direct the assessing officer to estimate the profit from the wine business of the assessee by applying the rate of 5% of the purchases made net of all other deductions. The assessing officer should also bear in mind that in no case the income determined should be below the income returned. 9. Considering the facts and circumstances of this case and also respectfully following the ratios of coordinate bench, we are of the view that the net profit estimated by the A.O. by relying u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of her wine business made available to the assessee s wine business to earn profit. It was also stated that she was assessed to tax and has reflected the transaction in the return filed for the Assessment Year 2011-12. The Assessing Officer did not find that the impugned transition was reflected in her bank accounts. When this was put to her, she represented that the amount of ₹ 7,50,000/- was given from her cash on hand as business investment to the assessee. She also stated that she would verify her record to clarify how the impugned investment was not reflected in her return. With reference to her sworn deposition and bank statement and verification with the IT return, the Assessing Officer concluded that the assessee failed to prove the creditworthiness of the creditor to advance the impugned amount. Accordingly, an amount of ₹ 7,50,000/- was added as unexplained income in the hands of the assessee. 10 . On appeal, it was submitted before the ld. CIT(A) that the creditor Smt.Goka Bujjamma was entered into an agreement with the assessee, as per which, an amount of ₹ 7,50,000/- was invested by each of them with an entitlement to 10% profit. It was further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of the creditor. I find no infirmity in the order passed by the ld. CIT(A). Thus, this ground of appeal raised by the assessee is dismissed. 15 . With regard to claim of agricultural income from HUF to the tune of ₹ 2,50,000/- from 5.5. acres of land is concerned, the Assessing Officer took a view that agricultural income to the tune of ₹ 55,000/- is acceptable. However, ld. CIT(A) has enhanced the agricultural income to the tune of ₹ 1 lakh in the individual status as available to explain the source for the initial expenditure/investment. I find that ld. CIT(A) has taken a reasonable view in calculating the agricultural income, hence, no interference is called for. 16 . Assessee has also challenged the addition of ₹ 3,49,461/- being unexplained amount. The Assessing Officer has asked the assessee to explain the source of ₹ 3,49,461/-. It was submitted before the Assessing Officer that it forms part of opening capital and it could not be added. The assessee has not filed any evidence to show that it forms part of the opening balance, therefore, the Assessing Officer added the same to the total income of the assessee. Even before the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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