TaxTMI 
TaxTMI 
2019 (1) TMI 1013
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.... 1. The impugned Appellate order dated: 3108-2018 passed by the Ld. CIT(A), Bangalore-4 is opposed to law, facts and circumstances of the case. 2. The Ld. CIT(A) has erred in holding that the application of the profit percentage at 8% on estimated turnover is sustainable without appreciating the fact that the turnover estimated by the AO at Rs. 2,04,15,866/- was apparently more than the prescribed limit of Rupees One Crore for which estimation of Income at 8% as per section 44AD is not applicable Rs.5,97,704/- (excluding interest of Rs. 3,19,433/-charged u/s. 234A, 234B and 234C) 3. The Ld. CIT(A) has erred in confirming the addition of Rs. 16,33,269/- estimated by the AO based on the Guidance Note of ICAI withou....
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....should be directed to compute the income of the assessee by applying 8% rate on actual turnover figure of the assessee. The ld. DR of revenue supported the order of CIT(A). 4. I have considered the rival submissions. The submission of the assessee before CIT(A) as per letter dated 31.08.2018 is reproduced by CIT(A) in Para 6 of his order and hence, for the sake of ready reference, I reproduce the same hereinbelow. "6. Assessee's submissions:- The written submission is filled by the assessee on 31/08/2018 is extracted as under: 1. The Appellant submits the following Written Submissions in support of the Appeal filed against the Assessment Order dtd: 30-11-2017. 2. The Appellant has been rendering co....
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....44AB is required. In the Appellant's case the AO himself has held that the Books of Accounts were not maintained and therefore the Provision of Section 44AB of the Act is not applicable and accordingly the Guidance Note of ICAI is of no consequence to the facts of the Appellant's case. 5. The Appellant submits that he has not carried on any Intra-Day Transactions as stated by the Ld.AO. The Appellant has carried on the transactions on the Principles of Futures and Options. The Ld. AO has not appreciated the fact that the Appellant is entitled to the deduction of Unfavorable/Negative Turnover against the Favorable/Positive Turnover. However the Ld. AO for computation of income out of the Share transactions has held that the ....
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.... Rs. 16,33,269/- on estimated Percentage basis on Turnover including Unfavorable/Negative transactions is opposed to law and facts of the case since the Appellant has incurred Net Loss of Rs. 86,43,842/- in the Share Transaction Business. 8. The Appellant submits herewith the following statements:- i. Return of Income for the A. Y 2015-16 with P & L Account, Balance Sheet and Statement of Income marked as Annexure - A. ii. A Copy of Statement of the Business Transactions relating to Options and Futures which resulted in loss of Rs. 1,34,84,016/- marked as Annexure - B. iii. A Copy of Statement of the Business Transactions relating to Options and Futures which resulted in income of Rs. 59,22,595/- marked a....
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....ble only up to turnover of Rs. 1 Crore. Under these facts, I feel it proper to restore back the matter to the file of CIT(A) for fresh decision by way of a speaking and reasoned order as to what is the actual turnover of the assessee because if amount of turnover of Rs. 2,04,15,866/- is obtained by adding back the amount of purchases and sales then the same cannot be considered as turnover because in my considered opinion only the amount of sale is turnover and not the amount of purchase. But in this regard, the guidelines issued by The Institute of Chartered Accountants of India (ICAI) should also be considered. Hence he should decide this aspect first by way of a speaking and reasoned order as to what is the turnover of the assessee. If i....