2017 (8) TMI 555

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....s suppressed by assessee. 2. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition of Rs. 58,15,229/- on account of unverifiable expenses debited in P&L account. 3. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in estimating the income by applying N.P. rate of 10% without considering the fact that assessee had suppressed the receipts and inflated the expenses." 2. Briefly the facts of the case are that the assessee has shown income from running of theatre and food planet for part of the year and the theatre was subsequently given on lease to Adlabs Films ltd. In order to verify the genuineness of the receipts & expenses w....

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....ame heads, during the year, assessee has shown much lesser income. Moreover, in the absence of proper books of account, fall in receipt cannot be justified & hence not acceptable. In view of the above, the base of earlier years receipt is applied for consideration of receipt during the year under consideration. Therefore, receipt from running theatre during the year under consideration is estimated at Rs. 3,23,654/-. Therefore, addition of Rs. 15,60,341/- (12,77,350 + 2,82,991) was made on account of under statement of receipt. 4. The AO further observed that assessee has claimed expenditure of Rs. 1,16,30,458/-. During the previous year percentage of expenses to income was 92% while the same for the year under consideration is 130%. In th....

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.... through the assessment order. It is noted that the AO has made the addition on the ground that the appellant had failed to furnish the books of account and vouchers in support of the receipts and expenditure shown by it. The AO compared the results of this year from sale of theatre tickets and restaurants and on that basis estimated the receipts from theatre at Rs. 57,88,705/- and from food planet at Rs. 3,23,654/-. 4.1 The claim of the appellant is that the facts of the year under consideration are totally different from the facts of the earlier year. During the year under consideration the cinema hall and canteen was run only for one and half month and for another one and half months there were not activities. After 3 months, the prop....

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.... by applying NP rate of 10% on the total turnover of Rs. 89,44,560/-. This would result in the net profit of Rs. 8,94,455/- after depreciation. The rest of the addition is deleted. 6.1 However, since the income of the appellant has been estimated by applying NP rate as para 4.2 above, further addition on account of expenses debited in the P&L account does not appear to be justified. The addition made on this account is, therefore, uncalled for and is, accordingly, deleted. 4. We have heard the rival contentions and pursued the material available on record. It is not in dispute that the assessee has earned income from running of theatre by way of sale of tickets and from sale in food planet for a part of the year and thereafter, the the....