TMI Blog2018 (9) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... on of unsecured loans - Held that:- Before the Ld.CIT(A) also the assessee failed to furnish any evidence to prove the genuineness of the outstanding unsecured loans. Therefore, we do not find infirmity in the order of the Ld.CIT(A) and the same is upheld. The appeal of the assessee on this ground is dismissed. Unsecured trade creditors addition - AR requested for admission of additional evidence in the form of confirmation - Held that:- As per para No.12 of this order, we have rejected the admission of additional evidence. In the instant case, the assessee failed to submit the confirmation and the details before both the lower authorities to establish the genuineness and correctness of the unsecured trade creditors. Even the assessee failed to furnish the names of the creditors. Therefore, we do not find any infirmity in the order of the Ld.CIT(A) and the same is upheld. The appeal of the assessee on this ground is dismissed. - I.T.A.No.110/Viz/2016 - - - Dated:- 12-9-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri C.Subrahmanyam, AR For The Respondent : Shri Ch.Sanjeev, DR ORDER PER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve 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 for verification, therefore rejected the books of accounts and estimated net profit of 20% by relying upon the decision of Hon ble A.P. High Court. It is the contention of the assessee that the net profit estimated by the A.O. is quite high when compared to the nature of business carried on by the assessee. It is further submitted that the case law relied upon by the assessee is not applicable to the facts of the present case. The case before the Hon ble A.P. High Court was that the assessee is into the business of trading in arrack, whereas it is in the business of dealing in IMFL. The assessee further contended that IMFL trade was controlled by the State Government through A.P. State Beverages Corporation Ltd. and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 upon the decision of Hon ble A.P. High Court (supra), which was rendered under different facts is quite high. On the other hand, the assessee relied upon the decision of coordinate bench and the coordinate bench under similar circumstances estimated the net profit of 5% on total purchases net of all deductions. No contrary decision is placed on record by the revenue to take any other view of the matter than the view so taken 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. 4.1. In view of the above decision of the coordinate bench of the Tribunal, the AO is directed to re-compute the income of the assessee at 5% of purchase price. Accordingly, this ground of appeal raised by the assessee is allowed. 5. Ground Nos.1.3 and 1.4. are related to the addition of ₹ 3,86,809/- towards unexplained expenditure. During the year the assessee claimed to have incurred the expenditure of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment afresh on merits. Accordingly, this issue is set aside and remitted back to the file of the AO denovo for fresh consideration. The appeal of the assessee on this ground is allowed for statistical purpose. 10. Ground No.1.5 is related to the telescopic benefit for the addition of ₹ 3,86,309/-. Since the issue with regard to the addition of ₹ 3,86,309/- is remitted back to the file of the AO for fresh consideration, Ground No.1.5 is also remitted back to the file of the AO for fresh consideration and to decide the issue afresh on merits and this ground is also allowed for statistical purpose. 11. Ground No.1.6 is related to the addition of ₹ 4,59,470/- relating to the trade creditors and ₹ 4,48,915/- related to unsecured loans. During the appeal hearing, the assessee filed petition for admission of additional evidence on this issue. The assessee explained in the petition for admission of additional evidence, that the confirmations could not be produced before the lower authorities as the parties from whom the confirmations are to be received were ignorant of the provisions and did not respond promptly. The AR explained that due to the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh the details and has not filed the confirmation letters. The AO has given sufficient opportunity but the assessee failed to respond to the opportunities given by the AO. For ready reference, we extract relevant part of the order of the AO in respect of trade creditors, which is made available in page No.4 para No.6 of the assessment order. 6. As seen from the balance sheet filed for the year ending 31.3.2011 the assesseehas shown to have taken unsecured loans of ₹ 4,48,915/- and sundry creditors of ₹ 4,59,470/-. During the course of hearing held on25.10.2012, the assessee's AR was specifically asked to prove the sundry creditors and unsecured loans with necessary documentary evidences. Since he has not furnished any information, vide the questionnaire issued along with notice u/s 142(1) on 13.9.2013, the assessee was again asked to prove the above liabilities. In response, the assessee filed a letter on 17.10.2013 stating that he has maintained regular books of account and the licence fees was paid out of his capital fund and unsecured loans of ₹ 4,48,915/- for which confirmation letters are being submitted. Except stating so he has not furnished confir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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