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TMI Blog2020 (10) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 651/RJT/2014 for A.Y. 2003-04. 2. The Revenue has proposed the following substantial question of law for the consideration of this Court:- "Whether on facts and in the circumstances of the case, the Appellate Tribunal was justified in restricting the addition of Rs. 7,78,35,500/- made by the Assessing Officer under section 68 of the Act to the extent of 2% of the total credits despite the fact that the assessee has failed to prove the source of credits, genuineness and creditworthiness of depositors? " 3. We have heard Mr. M.R. Bhatt, the learned Senior Counsel assisted by Ms. Mauna M. Bhatt, the learned Senior Standing Counsel appearing for the Revenue. 4. It appears that huge amount of cash credits was found in the bank account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition of Rs. 7,78,35,500/- made under Section 68 of the Act, 1961 and considered the deposits as the turnover of the assessee. The CIT(A) also directed to adopt the net profit rate of 8% on the turnover. 9. The assessee being dissatisfied with the order passed by the CIT(A), preferred appeal before the Appellate Tribunal. The Tribunal partly allowed the appeal filed by the assessee and dismissed the appeal filed by the Revenue holding as under:- "9. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the present case relates whether the amount deposited by the assessee in the form of cash/cheques represents the income of the assessee. Admittedly, there was huge d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting that the assessee had so much of the income as computed by the AO. As such the AO was under the obligation to bring on record to demonstrate that the assessee has made some investment or incurred some expenses out of such income. But there is no such information available with the Revenue. Indeed, the assessee has certainly has violated the provisions of law by not maintaining the books of accounts, furnishing income tax return, providing sufficient details but that does not lead to reach the conclusion that the amount deposited in the bank represents the undisclosed income of the assessee. As such, the deposits in the bank cannot be treated as income on standalone basis without considering the withdrawal. Thus in the absence of any i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e added and hence bench has confirm the addition of profit on sale rather that entire amount of sale. Shri Rakesh S. Chhaparwal (HUF) Vs. ITO. ITA No. 502 & 503/RJT/08 dated 28.08.2009 Rajkot Bench Ld. AO had made an addition by estimating of profit @5 % on sale of URD purchase. CIT(A), Jamnagar has restricted the said addition to 1.25%, which was upheld by hon. ITAT. Pushkar Raj J.Kabra Vs. ITO ITA No: 867/RJT/2009 dated 23.08.2010, Rajkot Bench L.d. AO had made an addition by estimating of profit @ 5% on sale of URD purchase. CIT(A), Jamnagar has restricted the said addition to 1.25%, which was upheld by Hon. ITAT by replacing addition on percentage basis to lumpsum addition of Rs. 5,00,000 against Rs. 22,24,031/- made by AO. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought on record, we are not inclined to uphold the finding of the learned CIT (A). 9.7 At the time of hearing, we requested the learned DR to depute the inspector of the income tax to conduct the enquiry at the place of the assessee to find out his financial status so that a rational /informed basis could be found out to estimate the income. But no such information was fumished to us. Hence we left with no alternate except to accept the contention of the assessee after some modification suiting to us in the given facts and circumstances. 9.8 Thus after considering the case law cited by the assessee we feel that justice will be served to both the assessee and the Revenue if the income is estimated at the rate of 2% of the amount deposite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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