TaxTMI 
TaxTMI 
2011 (7) TMI 1348
X X X X Extracts X X X X
X X X X Extracts X X X X
....jection are disposed off by this consolidated order. 2. The only ground raised in this appeal by the department reads as under :- "On the facts and circumstances of the case, Ld. CIT(A) erred in canceling addition made u/s. 69A by directing estimated profit @ 10% of such undisclosed deposits despite conceding that the assessee had failed to prove genuineness of expenditure." 3. The assessee-company is engaged in the business of providing security services to various clients. It filed return for the assessment year under consideration declaring total income of Rs. 13,253/-, which was processed u/s. 143(1) of the Act. Subsequently, the case was reopened u/s.148 of the Act and assessment was completed u/s. 147/ 143(3) of the Act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he his assessment records. He further observed that the assessee as well as A.O. had not furnished any comparable cases of rate of profit in similar line of business, though the assessee pleaded for taking net profit rate at 5% of the gross receipts. Considering the facts and circumstances of the case, ld. C.I.T.(A) estimated the rate of net profit at 10% on both disclosed and undisclosed receipts of the assessee and directed the A.O. accordingly. While doing so, ld. C.I.T.(A) observed as under :- "I have carefully perused the impugned assessment order, submissions made and the judicial decisions relied upon by the ld. AR. I am convinced that the records and evidences in respect of transactions routed through undisclosed bank accou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2328601 Expenditure Cost of dresses 232837 10% 286000 12% Direct expenditure 1700972 71% 1963845 84% 1933179 2249845 The chart furnished by appellant itself shows that the ratio of direct expenses to gross receipts is quite higher in respect of undisclosed receipts and therefore the claim of the appellant cannot be accepted in toto. Similarly, the stand of A.O. that no expenses have been incurred for earning the undisclosed part of receipts cannot be accepted because, the action of A.0 in treating the whole receipts in undisclosed bank account as income of the appellant is considered as correct, the rat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted by the assessee. The A.O. without considering the expenditure incurred for earning such undisclosed income, which was to the extent of Rs. 22,84,504/-, added back the entire receipts to the total income of the assessee u/s. 69A of the Act. He further submitted that in the succeeding assessment year, i.e. A.Y. 2007-08, profit @ 6% was considered by the same A.O. and, therefore, the addition should be restricted to 6% of the undisclosed receipts as against 10% estimated by ld. C.I.T.(A). A copy of assessment order for A.Y. 2007-08 has also been filed before us. 6. On the other hand, ld. Departmental Representative submitted that in the subsequent assessment year, i.e. A.Y. 2007-08, the undisclosed receipt was of a meager amount of Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....except two persons, no one either appeared or traceable by the Inspector. According to the A.O. further, the assessee could not produce original bills or wage register and evidences in respect of indirect expenses claimed by the assessee. In the above circumstances, the A.O. held the expenditure claimed by the assessee as not genuine and thus added back the entire receipts of Rs. 23,28,601/- deposited in the undisclosed bank account as assessee's unexplained money u/s. 69A of the Act. The ld. C.I.T.(A) did not endorse the stand of the A.O. that no expenses have been incurred for earning the undisclosed part of receipts. In that case, the rate of net profit on both disclosed and undisclosed portion of receipts would be more than 50%, which, ....