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TMI Blog2023 (12) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% profit on sale of imlo. The addition retained is totally unjustified and uncalled for and deserves to be deleted and may kindly be deleted. 3. The learned Commissioner of Income-tax (Appeals)-11, Ahmedabad (CIT)A erred on facts as also in law in retaining addition of Rs. 1,50,000/- by estimating household expenditure. The addition retained in totally unjustified and uncalled for and deserves to be deleted and may kindly be deleted. 4. The first issue raised by the assessee is that the learned CIT(A) erred in sustaining the addition of Rs. 41,55,750/- by estimating the profit @ 7.5% on sale of Imlo of old constructed building materials. 5. The facts in brief are that the assessee is an individual and claimed to be engaged in the activity of broking business. The assessee in the year under consideration has not filed any return of income under section 139 of the Act. A search proceeding under section 132 of the Act dated 19th September 2014 was carried out at the premises of "Angadiya" namely Shri Chetan Haribhai Bhalodiya proprietor of "Yes Enterprise". During the search, it was found that the assessee has taken cheque amounting to Rs. 6.5 crore in lieu of cash from "Yesh Ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of return of income and the books of account, income has to be estimated on the basis of turnover. In order to avoid hard ship to the tax payer public at large, the legislature had provided provisions of section 44AD to tax the income at eight percentage of total turnover of eligible business. No doubt the appellant's turnover does not come within the ambit of provision of section 44AD of the Act, however, it gives some sort of reasonableness in determining the income of an assessee. Any business other than plying, hiring or leasing goods carriage falls within the ambit of explanation of eligible business subject to limit of turnover prescribed therein. In the present case the wastage / debris obtained from demolition of building is a business of scrap dealer which is claimed to be of inferior in nature as such earning capacity is on lower side. In the absence oa any comparable case, on the analogy of section 44AD of the Act, the estimation of profit @7.5% would meet the end of justice. The AO is therefore directed to tax income of Rs. 41,55,750/0 which is 7.5% of Rs. 5,54,10,000/-. Thus, out of total addition of Rs. 55,41,000/- the appellant gets relief of Rs. 13,85 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the bank. Thus, we are of the view that the profit estimated by the learned CIT-A is reasonable and commensurate with the activities carried on by the assessee. Hence the ground of appeal of the assessee is hereby dismissed. 11. The next issue raised by the assessee is that the learned CIT(A) erred in estimating the household expenses at Rs. 1.5 lakh thereby confirming the addition to that extent. 12. The AO during the assessment proceeding proposed to estimate the household expense of the assessee at Rs. 3 Lakh from undisclosed sources. The assessee objected to the proposal of the AO by stating that his household expenses consist for only 2 persons which met out of the accumulated earning from brokerage income from earlier year as well profit earned on sale of imlo. 12.1 The AO did not accept the explanation of the assessee and estimated the household expenses from undisclosed sources at Rs. 3 Lakh and added the same to the total income of the assessee. 13. The aggrieved assessee preferred an appeal before the learned CIT(A). The learned CIT(A) provided part relief to the assessee by reducing the household expenses from undisclosed sources at Rs. 1.5 Lakh. 14. Being aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for and deserves to be deleted and may kindly be deleted. 20. At the outset, we note that the issues raised by the assessee in its grounds of appeal for AY 2012-13 are identical to the ground of appeal raised by the assessee for A.Y. 2011-12 in ITA No. 91/Ahd/2019. Therefore, the findings given in ITA No. 91/Ahd/2019 shall also be applicable for the year under consideration i.e. AY 2012-13. The grounds of appeal of the assessee for A.Y. 2011-12 has been decided by us vide paragraph Nos. 10 and 17 of this order wherein the issue of estimation of profit on sale of imlo has been decided against the assessee whereas issue of addition on account of household expenses has been decided in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2011-12 shall also be applied for the year under consideration i.e. AY 2012-13. Hence, the ground of appeal relating to the estimation of profit is dismissed whereas the ground of appeal relating the household expenses is allowed. 21. In the result, the appeal of the assessee is hereby partly allowed. Coming to ITA No. 93/AHD/2019 for A.Y. 2014-15 22. The assessee raised followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 27. The learned AR before us contended that the deposits in the bank represent brokerage income and loans from friends and therefore no addition in the given facts and circumstances is warranted. 28. On the other hand, the learned DR vehemently supported the order of the authorities below. 29. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, there were deposits in the bank account of the assessee and therefore the onus lies upon the assessee to justify the source of the same. But the assessee has not justified the same based on the documentary evidence. Accordingly in the absence of any explanation by the assessee about the source of money in the bank account, we have no other alternative except to confirm the order of the authorities below. Hence the ground of appeal of the assessee is hereby dismissed. 30 The second issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of Rs. 21,25,000/- representing the purchase of a car from undisclosed sources. 31. The AO during the assessment pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 48.75 lakhs pertaining to earlier years (A.Y. 2011-12 and 2012-13) a sum of Rs.6 Lakhs has only been utilized towards the household expenses. The revenue has not brought any iota of evidence suggesting that the earlier years income suffered to tax has been used for some other purposes either by way of making some investment or expenditure. Thus, in the absence of such information, it can be presumed that the amount of income which has suffered tax in the earlier year has been utilized for the purchase of the car. The earlier income after adjusting household expenses stands at Rs. 42.75 lakhs and the cost of the car purchased in the year comes at Rs. 21.25 lakhs only. Still the balance income available with the assessee stands at Rs. 21.50 Lakhs ( Rs. 42.75 lakhs - Rs. 21.25 lakhs). In view of the above, we hold that there was sufficient tax paid money available with the assessee which has been used for acquiring the car on hand. Therefore, no separate addition on account of purchase of car is required to be made. Hence, the ground of appeal of the assessee is hereby allowed. 37. The last issue raised by the assessee is that the learned CIT(A) erred in estimating the househ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is that the learned CIT(A) erred in confirming the addition of Rs. 41,03,460/- representing the purchase of a car from undisclosed sources. 44. The AO during the assessment proceedings found that the assessee has purchased Audi Car for Rs. 41,03,460/- and payment of the same was made by purchasing cheque from Angadiya namely "Yash Enterprises" in lieu of cash. The sources of money to the tune of Rs. 41,03,460/- used against the purchase of car was not explained and therefore the AO made the addition to the total income of the assessee. 45. On appeal, the learned CIT-A also confirmed the same by observing as under: 7.2 The appellant purchased cheques of Rs. 41,03,460/- by paying similar cash for purchase of ford car. In the course of assessment proceedings as well present proceedings has claimed that the cheques were purchased from profit earned from imlo business as well from commission income etc. However, it is observed from the bank statement of the appellant that though he made various transaction from his bank account with Union Bank as well as with Bank of Baroda however, he did not routed the funds from this account to purchase car but had obtained cheque by deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount of Rs. 5,88,460/- can be added to total income of the assessee on account of purchase of car from undisclosed/unexplained sources whereas remaining amount of Rs. Rs. 35.15 lakhs shall be presumed to be sourced from the earlier income already suffered to tax. Hence, the ground of appeal filed by the assessee is hereby partly allowed. 50. The last issue raised by the assessee is that the learned CIT(A) erred in estimating the household expense at Rs. 1.5 lakh thereby confirming the addition to that extent. 51. At the outset, we note that the issues raised by the assessee in its grounds of appeal for AY 2015-16 are identical to the ground of appeal raised by the assessee for A.Y. 2011-12 in ITA No. 91/Ahd/2019. Therefore, the findings given in ITA No. 91/Ahd/2019 shall also be applicable for the year under consideration i.e. A.Y. 2015-16. The ground of appeal of the assessee for A.Y. 2011-12 has been decided by us vide paragraph No. 17 of this order in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2011-12 shall also be applied for the year under consideration i.e. AY 2015-16. Hence, the ground of app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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