TaxTMI 
TaxTMI 
2016 (7) TMI 11
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....e of Rs. 4,74,280/-. This case is selected for scrutiny. During assessment proceedings, assessee was asked to explain the cash deposits reported in AIR information for Rs. 47,09,460/-. In response, assessee submitted that he had two kinds of turnover, retail business of Rs. 2,90,60,566/- dealing in organised sector and wholesale business of Rs. 64,46,043/- dealing in unorganised sector. He has reported both the businesses in return of income, but, followed the provisions of section 44AB only to the turnover of retail sector. Since the wholesale business is dealing with unorganised sector, only self-made bills/vouchers were made available and these were not offered for audit as per section 44AB. The portion of the sale proceeds were deposite....
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....e specified date and furnish a report of such audit as per the provisions of Section 44AB of the Income Tax Act, 1961. However, the assessee has failed to maintain complete books of accounts and get his accounts audited. In view of the above facts, the assessee has failed to maintain the complete books of account as required under the provisions of the Income Tax Act. Hence, I am not satisfied about the correctness and completeness of the books of accounts maintained by the assessee and, therefore, the books of account are rejected as per the provisions of Section 145(3) of the I.T. Act and the assessment is completed estimating the income @ 10% on the total turnover of Rs. 3,55,06,609/-, which works out to Rs. 35,50,660/-. In respect of ba....
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.... not maintained and further erred in estimating the rate of profit at 5%. 3. The learned Commissioner of Income Tax ought to have considered the order for the assessment year 2009- 10, wherein, profit on regular sales was estimated at 3.25% and from the sale of burnt oil at 3.5%. 4. The learned Commissioner erred in estimating the profit at 5% in respect of the total turnover of Rs. 3,55,06,609/- whereas no defects were pointed out by the Assessing Officer in respect of turnover of Rs. 2,90,60,566/- and further erred in assuming that the purchases are supported by only self vouchers in respect of en tire turnover." 6. Revenue has raised the following grounds of appeal. "1. Ld.C1T(A) erred on both law and facts of the case. 2. Ld.CI....
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....f account were maintained for turnover amounting to Rs. 64,46,043/-, the entire business of Rs. 3.55 crores are in cash and the purchases were supported by only self-made vouchers. He submitted that the observations of the CIT(A) are not true. He submitted that the assessee had maintained proper vouchers of sales and purchases in the retail business and only wholesale business, the self-made vouchers were made for purchases and sales. He also submitted that the assessee had offered the books of account for audit as per section 44AB and got it audited (refer pages 71-79 of the paper book). 7.2 Ld. AR further submitted that in the earlier AY 2009-10, assessee admitted sales of Rs. 3,01,86,331/-, inadvertently sale of Rs. 96,41,731/- relating....
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....h the businesses and preferred to estimate the income. Ld. AR submitted before us clearly that the retail business was audited by a Chartered Accountant as per the provisions of section 44AB. The issue before us is relating to wholesale business, which was not audited and only self-made vouchers are available. Since there is no change in the nature of business from AY 2009-10 to the current AY, we do not find any reason to adopt the rate of 3.5% on wholesale business as adopted by the AO in the previous AY 2009-10. With regard to retail business, assessee offered 3% in the AY 2009-10 and AO made some disallowance. But in the current AY 2011-12, assessee had offered only 2%. In line with the income determined in AY 2009-10, we are inclined t....