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TMI Blog2020 (11) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... ds as under : "1. BECAUSE the ld. CIT (A) has erred in law on facts in not accepting the book result declared by the appellant, duly supported by regular books of accounts as maintained by the appellant, without appreciating the facts as were available on the records and confirmed the addition of Rs. 1,04,454/-. 2 BECAUSE the sales as disclosed by the books of accounts are duly been accepted by the sales tax authority and the purchases are duly verifiable the enhancement of gross profit rate from 22% to 25% is wholly uncalled for and unjustified. 3.BECAUSE the ld CIT (A) has erred in law and on facts in upholding the addition of Rs. 60,000/- under the head "Business of Paan" without appreciating the facts that said business are carried on by the father of the appellant Shri Sunder Lal Keserwani who has been regularly assessed to tax in Range 1(4) Allahabad. 4.BECAUSE the ld CIT(A) has erred in law and on facts in holding that the acknowledgement of the return does not give the picture of the details of income under Particular heads" and deciding the issue against the appellant without proper application of mind. 5.BECAUSE the addition of Rs. 5,00,000/- as received fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition was made by the AO wherein there was an enhancement of profit ratio to 25% as against profit ratio declared by the assessee to the tune of 20% , which addition was later confirmed by ld. CIT(A). There was no dispute so far as quantum of sales are concerned of cold drinks. The AO had observed that the assessee has purchased cold drinks and later on there was mixing of some masalas to these cold drinks which were later sold as 'Masala Drinks' at higher price which gives a profit margin of 33% , but profit ratio was enhanced by the AO to 25% while framing assessment against the assessee . The AO had observed that proper books of accounts were not maintained by the assessee , as detailed in the assessment order which led to rejection of books of accounts by the AO . Section 145(3) of the 1961 Act was invoked by the AO and accordingly higher profit margin was adopted by the AO while assessing income of the assessee, as detailed above. The ld. CIT(A) rejected the contentions of the assessee and confirmed the additions as were made by the AO. Before us, the ld. Counsel for the assessee has vehemently argued that no addition was justified, even in the case books of accounts are reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase price of cold drinks is Rs. 9 for 300 ml bottle which sale price of masala drink is Rs. 12 for 300ml , fetching gross margin of 33%, but the profit margin were enhanced by AO to 25% as against declared profit margin of 20%. The assessee is contending that he has not sold the entire cold drinks purchased during the year in the form of Masala Drinks but only portion of sales of cold drinks were in the form of Masala Drinks which had yielded higher income. The assessee on its part has not filed complete details , nor stock records were filed as well balance sheet were not filed. The authorities below have detailed in their orders about non submission of records by the assesse. The details called for by the Bench has also not been filed for the profits declared in the preceding years and its acceptability by Revenue for those years. Under these circumstances, it is important to compare profit ratio declared by the assessee in the earlier years and the acceptability of the same by the Department in those years. The learned counsel for the assesse was directed by the Bench to file complete details of the profit ratios of the preceding years declared by the assesse and its accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of cold drinks , but detailed elaborations are not given rather a bald statement has been made by authorities below that the assessee is also engaged in business of PAAN which is not sufficient to fasten tax liability on the assessee. The Revenue is not able to demonstrate with evidence that the assessee was engaged in the business of PAAN also and income from the business of PAAN has not been declared by assessee in the return of income filed by assessee with Revenue. The powers of the ld. CIT(A) are co-terminus with the power of the AO and he could have made detailed enquiry to unravel the truth , but no concrete evidence/findings are brought on record to rebut contentions of the assessee that business of PAAN was carried out by his father from the same shop outlet in Civil Lines, Allahabad and the same has been offered for taxation by his father. Under these circumstances since no material/evidence is available on record to prove that business of PAAN was carried out by assessee, we hereby delete the addition of Rs. 60,000/- made by the AO on account of business of PAAN which was later confirmed by the CIT(A). The assessee succeeds on these grounds number 3 and 4 filed by it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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