TaxTMI 
TaxTMI 
2011 (7) TMI 1348
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....olidated 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 ₹ 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 on a total income of ₹ 24,56,230/- ma....
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.... 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 account are not properly maintained an....
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....ct 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 rate of net profit of the disclosed and undisclosed portion taken together would be more than 50% of the gross receipts. By no stretch of imagination, this rate of net profit is likely to be in the....
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....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 ₹ 2,87,785/- and, therefore, it is not comparable to the undisclosed income of the assessment year under consideration where the undisclosed receipt was to the tune of ₹ 23,28,601/-. H....
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....idences 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 ₹ 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, according to him, is illogical in the line of business the assessee involved. He, therefore, estimated the rate of net profit @ 10% of gross receipts (both disclosed & un....