TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 1150
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....onvenience. ITA 616/Vizag/2014: 2. The facts in this case are in brief that the assessee is carrying on business for Indian made foreign liquor (IMFL). The assessee had filed a return of income by declaring total income of Rs. 2,02,690/-. The case of the assessee was selected for scrutiny and after following the due procedure, assessment was completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as 'the Act'). 3. During the course of assessment proceedings, the A.O. has noted that assessee has made purchases to the tune of Rs. 91,11,524/- and declared sales of Rs. 1,16,83,213/- and admitted net profit of Rs. 2,02,690/-. The A.O. has called the assessee to produce the bills & vouchers for the liquor sales and supporting evidence for expenditure incurred. The assessee was not able to produce any bills & vouchers. He has submitted that the assessee has to purchase liquor from Andhra Pradesh Beverages Corporation Ltd. (APBCL) and thereafter he has to incur various expenditures, the margin of which is very limited and submitted that the profit declared by the assessee may be accepted. The A.O. after considering the explanation of the assessee, he is of the opin....
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....e similar to the case relied by the Ld. Counsel for the assessee. That apart, the coordinate bench of the Tribunal recently in the case of Tangudu Jogisetty in ITA No.96/Vizag/2016 dated 2.6.2016 has considered the very same issue and restricted the estimation at 5% on total purchases net of all deductions by following the case of T. Appalaswamy, Visakhapatnam (supra). The relevant portion of the order is extracted as under: "8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The A.O. estimated net profit of 20% on stock put for sale. The A.O. was of the opinion that the assessee has not maintained proper books of accounts and vouchers in support of purchases and sales. The A.O. further observed that the assessee has failed to maintain stock registers and books of accounts maintained by the assessee are not susceptible for verification, therefore rejected the books of accounts and estimated net profit of 20% by relying upon the decision of Hon'ble A.P. High Court. It is the contention of the assessee that the net profit estimated by the A.O. is quite high when compared to the nature of business carrie....
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....of the purchases made by the assessee. Therefore, following the decision of the ITAT Hyderabad bench, we set aside the order of the CIT(A) and direct the assessing officer to estimate the profit from the wine business of the assessee by applying the rate of 5% of the purchases made net of all other deductions. The assessing officer should also bear in mind that in no case the income determined should be below the income returned." 9. Considering the facts and circumstances of this case and also respectfully following the ratios of coordinate bench, we are of the view that the net profit estimated by the A.O. by relying upon the decision of Hon'ble A.P. High Court (supra), which was rendered under different facts is quite high. On the other hand, the assessee relied upon the decision of coordinate bench and the coordinate bench under similar circumstances estimated the net profit of 5% on total purchases net of all deductions. No contrary decision is placed on record by the revenue to take any other view of the matter than the view so taken by the coordinate bench. Therefore, we direct the A.O. to estimate the net profit of 5% on total purchases net of all deductions. Ordered ac....
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....t he has taken unsecured loan of `1,50,000/- each less than Rs. 20,000/- during the month of June, 2016. These unsecured loans were also repaid during the financial year 2010- 11 itself. However, the assessee is not able to produce any evidence. The A.O. after considering the explanation given by the assessee, the entire amount of Rs. 3,28,351/- is treated as unexplained expenditure and brought to tax under the head "other sources" for the reason that the assessee is not able to substantiate the sources with any evidence. 12. Assessee carried matter in appeal before the Ld. CIT(A). Ld. CIT(A) confirmed the order of the A.O. 13. Before us, the Ld. Counsel for the assessee has submitted that in so far as capital induction of Rs. 10,15,000/- is concerned, assessee is into various businesses for the last 20 years and out of savings, he has made the investments though he has not filed any return of income and submitted that one more opportunity may be given to the assessee to substantiate his case before the A.O. He also submitted that all the details are available with the assessee and prayed that the issue may be remitted back to the A.O. in both the counts i.e. opening balance as we....