TMI Blog2017 (12) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness to ₹ 83,17,700/- as against ₹ 89,57,700/- held by the CIT(A) and as a consequence thereof restrict the addition on account of Net profit earned thereon to ₹ 12,47,655/- as against ₹ 13,49,566/- held by the CIT(A). Further we direct that the addition made on account of undisclosed investment in the business of ₹ 8,99,700/- be deleted. Appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed. - ITA No.1231/Chd/2016 And ITA No.1381/Chd/2016 - - - Dated:- 8-9-2017 - SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER For The Assessee : Shri Rohi t Goyal, CA For The Department : None ORDER PER ANNAPURNA GUPTA, A.M. : The above cross appeals by the assessee and the Revenue, have been filed against the order of learned Commissioner of Income Tax (Appeals), Karnal dated 4.10.2016 for assessment year 2011-12. 2. At the outset it may be pointed out that none appeared on behalf of the Revenue on the date of hearing. A letter communicating the reason for non-appearance of any representative of the Revenue on the said date was filed before us. As per the said communicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e upholding of addition to the extent of ₹ 22,49,266/- raising the following grounds: 1. The learned Commissioner of Income Tax (Appeals) has erred in law and facts in confirming an addition of ₹ 22,49,266/- out of an addition of ₹ 89,57,700/- made by AO on account of deposits in HDFC Bank. 2. That learned Commissioner of Income Tax ( Appeals) has erred in law and facts in making an addition of ₹ 13,49,566/- by estimating profit @15% of total deposits in bank. 3. That learned Commissioner of Income Tax ( Appeals) has erred in law and facts in making an addition of ₹ 8,99,700/- on account of undisclosed investment in bank deposit by estimating Investment @ 10% of total deposits in bank. 4. That Appellant craves leave to add, alter, amend or to substitute the above grounds of appeal either before or at the time of hearing of case. 7. The Revenue, on the other hand, has challenged the deletion of addition to the extent of ₹ 67,08,434/- and has raised the following grounds before us: 1. On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals), Karnal has erred in law in dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash in hand available with the assessee as at the beginning of the year. The Ld. counsel for assessee pointed out that the cash withdrawals of ₹ 1,80,000/- and ₹ 3 lacs made on 16.3.2010 and 18.3.2010 and the deposit of ₹ 1,40,000/- on 29.3.2010, reflected in he bank account of the assessee placed at Paper Book page No.17 demonstrated the availability of cash in hand as at the beginning of the year to the extent of ₹ 3,40,000/-. Thereafter the Ld. counsel for assessee stated that ₹ 1 lac could be assumed as being present with the assessee from his accumulated past savings. 11. We find merit in the above contentions of the Ld. counsel for the assessee. The Ld. counsel for assessee has demonstrated the availability of cash in hand of ₹ 3,40,000/- on account of withdrawals made in the month of March. The same, we find, was confronted to the Assessing Officer during remand proceedings who has not controverted this fact in his Remand Report. The Ld.CIT(Appeals) also has not controverted the above stated fact. Therefore, to the extent of ₹ 3,40,000/- it can be safely stated that cash in hand was available with the assessee as at the beginning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee had not declared any profit from the sale of bada in his return of income and, therefore, no credence ought to be given to this contention raised by the assessee. We are in agreement with the observations of the Assessing Officer in this regard. Further we find that the assessee has not been able to duly substantiate the sale of the said bada. Except for furnishing an affidavit in this regard which is self-serving document no other documentary evidence has been filed. We, therefore, reject this contention of the Ld. counsel for assessee and hold that no part of cash deposits can be attributed to sale of bada. 14. The assessee has further contended that it had withdrawn ₹ 2,50,000/- from his KCC account and deposited in cash the said amount in his bank. The Ld. counsel for assessee drew our attention to the copy of bank statement of KCC of the assessee placed at Paper Book page Nos. 13 and 14 reflecting the withdrawal of ₹ 2,50,000/- on 16.8.2010. 15. On going through the order of the Ld.CIT(Appeals) we find that this fact was there before the Assessing Officer and the Ld.CIT(Appeals) who have not controverted the same. Having demonstrated the avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk as being related to the business of the assessee from property dealing and estimating the profits thereon @ 15% we hold that the net profit of the assessee from the said business be estimated at an amount of ₹ 12,47,655/-. 20. The Ld. counsel for the assessee had also contested the estimation of net profit @ 15% of the turnover. In support of his argument, the Ld. counsel for the assessee has taken shelter of section 44AF of the Act and stated that the rate prescribed therein of 8% was to be applied for estimating the same. 21. We find no merit in this contention of the Ld. counsel for the assessee. Section 44AF of the Act prescribes net profit rate in the case of retail trade which is totally different from the property dealing business. Therefore, the rate of 8% cannot be said to be suitable for the purpose of determining the profits from the property dealing business. The Ld. counsel for the assessee, we find, has not pointed out any anomaly in the rate applied by the Ld. counsel for the assessee, nor has pointed out any other reasonable rate by bringing out comparative instances in the property dealing. We, therefore, hold that in the absence of any such informat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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