AI Drafter 
TaxTMI 
TaxTMI 
2017 (8) TMI 605
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.... The assessee had filed return of income by declaring total income of 2,04,420/-, which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter called as 'the Act'). Later on, case of the assessee was selected for scrutiny and assessment was completed u/s 143(3) of the Act by estimating net profit at 20% of the stock put to sale. 3. On appeal, the Ld. CIT(A) scaled down the percentage from 20% to 10% and directed the A.O. to re-compute the income at 10% of purchase price. 4. On being aggrieved, assessee carried matter in appeal before the Tribunal. At the time of hearing, the Ld. Counsel for the assessee has submitted that the issue involved in this appeal is squarely covered by the decision of the coordinate bench o....
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....on'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 carried on by the assessee. It is further submitted that the case law relied upon by the assessee is not applicable to the facts of the present case. The case before the Hon'ble A.P. High Court was that the assessee is into the business of trading in arrack, whereas it is in the business of dealing in IMFL. The assessee further contended that IMFL trade was controlled by the State Government through A.P. State Beverages Corporation Ltd. and the prices of the products are fixed by the State Government. The assessee being a license holder of State Government cannot sell the products over ....
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.... issue is no more res integra in view of a series of decisions of the ITAT Hyderabad bench in similar cases. The coordinate bench in case of ITA No.127/Hyd/12 and others dated 18.05.2012 as well as a number of other cases have held that profit in case of business in Indian made foreign liquor has to be estimated at 5% 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 return....
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.....7,50,116/- Therefore, Assessing Officer called upon the assessee to explain why the difference amount of Rs. 20,99,461/- should not be treated as unexplained expenditure. In response to the show-cause notice, the assessee has explained that he had received an amount of Rs. 7,50,000/- from Smt. Goka Bujjamma, Rs. 7,50,000/- from Goda Jagannadam and agricultural income from HUF status of Rs. 2,50,000/-. During the course of assessment proceedings, Assessing Officer has observed that the assessee sought to explain that the unsecured loans taken from Smt.Goka Bujjamma and Shri Goda Jagannadam of Rs. 7,50,000/-, each was available to explain part of initial investment or expenditure. 9. In regard to creditor - Smt. Goka Bujjamma, she deposed....
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....before the ld. CIT(A) that Smt. Goka Bujjamma is assessed to tax; filed her return of income for the Assessment Year 2010-11. She filed balance sheet however, in the return for the Assessment Year 2011-12, the balance sheet was not filed. A copy of the said agreement and balance sheet filed for 31/03/2010 was also submitted. The ld. CIT(A) after perusal of the balance sheet observed that her cash on hand as on 31/03/2010 was Rs. 94,882/-. No other evidence was adduced to show that she had sufficient cash to make the impugned advance. The assessee also did not file any statement of affairs to show that the impugned transaction was reflected in her return filed for Assessment Year 2011-12. Accordingly, ld. CIT(A) confirmed the order of the As....
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....efore, ld.CIT(A) confirmed the order of the Assessing Officer by observing that the assessee failed to prove the creditworthiness of the creditor. I find no infirmity in the order passed by the ld. CIT(A). Thus, this ground of appeal raised by the assessee is dismissed. 15. With regard to claim of agricultural income from HUF to the tune of Rs. 2,50,000/- from 5.5. acres of land is concerned, the Assessing Officer took a view that agricultural income to the tune of Rs. 55,000/- is acceptable. However, ld. CIT(A) has enhanced the agricultural income to the tune of Rs. 1 lakh in the individual status as available to explain the source for the initial expenditure/investment. I find that ld. CIT(A) has taken a reasonable view in calculating ....