TMI Blog2020 (11) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... d its acceptability by Revenue and if the same were accepted by Revenue in those three years and similar business is carried on by the assessee in the impugned ay, then in that situation, the AO is directed to adopt average of the profits for the last three years or the profits declared by the assessee for the impugned ay which ever is higher - in case suppression is detected by AO keeping in view peculiar/specific facts(evidences) and circumstances in the year under consideration, then the onus is on the AO to bring on record profit earned by other persons in the similar businesses, and then based upon the same, the profit of the assessee be computed by Revenue for impugned ay. Thus, the matter is remitted back to the AO for denovo determination of the issue on merits. Additions being made with respect of income from business of PAAN alleged to have been carried out by the assessee - assessee has demonstrated before the authorities below that the business of PAAN were carried out by his father and not by the assessee - HELD THAT:- 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 P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 (hereinafter called the Act ) for ay: 2008-09. We have heard both the parties through video conferencing mode through virtual court. 2. The grounds of appeals raised by assesse in memo of appeal filed with Income- Tax Appellate Tribunal, Allahabad ( hereinafter called the tribunal ) reads 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 ₹ 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 ₹ 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs which were admittedly duly served on the assessee. The assessee on his part has participated in assessment proceedings conducted by AO and submitted replies to the queries raised by AO from time to time during the course of assessment proceedings. There were three additions which are subject matter of appeal before the tribunal. The first addition 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 highe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Holdings Private Limited on 01.01.2007. The assessee is having a shop outlet in Civil Lines, Allahabad. The assessee is making masala drinks after adding Masala into Pepsico to add value to the cold drinks purchased of Pepsico. The assessee has declared profit margin of 20% , which has been enhanced to 25% by the AO as in view of the AO , the purchase price of cold drinks is ₹ 9 for 300 ml bottle which sale price of masala drink is ₹ 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 yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ather for ay: 2008-09 to contend that business of PAAN was carried out by his father and income from the same was duly accounted for by his father which was scrutinized by Revenue u/s 143(3) read with Section 143(2) of the 1961 Act . The finding has been given by authorities below that the assessee was also carrying out business of PAAN apart from business 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 tax ..... 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