TaxTMI 
TaxTMI 
2019 (5) TMI 742
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....hat the assessee is an individual and engaged in the business of liquor contractor. Regular return of income was filed for A.Ys. 2012-13 & 2013-14 which were selected for scrutiny assessment through CASS followed by serving of notices u/s u/s 143(2) & 142(1) of the Act. During the course of assessment proceeding Learned Assessing Officer (in short Ld. AO) observed that the assessee has not maintained proper quantitative as well as sales details. He accordingly rejected the books of accounts and after giving reference to other businessmen carrying out same business activity estimated net profit @ 3.5% of the total turnover and made the addition for difference between the estimated net profit @ 3.5% and net profit declared by the assessee. Other additions were also made. Penalty also levied u/s 271(1)(c) of the for A.Y. 2012-13 which is under appeal before us. 4. We first take up cross appeal for A.Y. 2012-13 wherein following grounds of appeal have been raised by the assessee and Revenue: ITANo.28/Ind/2017 by Assessee 1.That the Ld. CIT(A) erred and confirmed the action of assessing officer in rejecting the books of accounts without pointing out any material def....
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....2011-12 A.Y. 2012-13 A.Y. 2013-14 1. Sales: Foreign Liquor Country Liquor 37834548 148333082 94456239 357607272 71435987 295898023 Total 186167630 452063511 367334010 2 Net Profit Less: Commission Income 5159409 (1039861) 5615050 (822969) 5646475 (1000366) Net Profit before Commission income 4119548 4792081 4646109 3 Net profit Ratio(without commission) 2.21 1.06 1.26 4 Net Profit Ratio (with Commission) 2.77 1.24 1.54 5 Number of Shops: Foreign Liquor 1 4 4 Country Liquor In Burhanpur 0 1 1 In Jabalpur 0 4 4 In Indore 8 8 6 8 13 11 Total Shops 9 17 15 8. From the perusal of the above table it is noteworthy that net profit rate declined drastically in A.Y. 2012-13. During A.Y. 2011-12 Net profit including commission of Rs. 51,59,409/- has been shown on the gross turnover of Rs. 18.62 crores but surprisin....
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....e that the assessee sold land and received sale consideration of Rs. 14,32,000/- thereon. Cost of acquisition of the land and transfer expenses were shown at Rs. 8,14,555/-. The short term capital gain is arising at Rs. 6,17,445/-. The assessee made a claim of exemption u/s 54B of the Act at Rs. 6,17,445/- but no evidence placed in support thereof before both the lower authorities. Even during the course of hearing before the Tribunal assessee has not made any submissions with regard to claim of deduction u/s 54B of the Act at Rs. 6,17,445/-. 13. In these given facts and circumstances of the case there seems no reason to interfere in the finding of Ld. CIT(A) confirming the addition. Ground no.3 raised by the assessee deserves to be dismissed. 14. As a result, Cross appeal for A.Y. 2012-13 stands dismissed. Now we take cross appeal for A.Y. 2013-14 15. We have heard the rival contentions and perused the record placed before us. The following grounds of appeal have been raised. ITANo.253/Ind/2017Assessee's appeal for A.Y. 2013-14 i. Whether on the fact and in the circumstances of the case ld. CIT(A) has erred in restricting the net profit rate at 2.16% ....
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....in the asessee's case for A.Y.2012-13 in the preceding paragraphs. 18. We, therefore, consistently taking same view confirm the finding of ld. CIT(A) taking average net profit rate being average net profit rate of 5 years at 2.16%. We accordingly find no reason to interfere in the finding of the Ld. CIT(A) and hold that the net profit in the case of assessee to be computed 2.16% of the total turnover. However, this finding as well as finding for A.Y. 2012-13 should not be taken as basis in the subsequent years and in case similar issue comes in future it should be decided on the basis of facts and figure for the year under appeal. In the result this common issue of estimation of net profit raised by both assessee and revenue stands dismissed. 19. Now we take ground No.3 of assessee's appeal for A.Y. 2013-14 for addition of unexplained unsecured loan u/s 68 of the Act at Rs. 47,77,000/-. 20. We have heard the rival contentions and perused the record placed before us. During the course of assessment proceeding Ld. AO observed that a sum of Rs. 47,77,000/- has been taken as unsecured loan from six different parties. Assessee was unable to furnish any evidence to establish the....
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.... Rs. 47,77,000/-. Accordingly ground no.4 of the assessee,s appeal is dismissed. 22. As a result, assessee's appeal for A.Y. 2013-14 is dismissed. 23. Now we take ground no.4 raised by the Revenue relating to deletion of addition of Rs. 60,19,920/- made by the AO u/s 69 of the Act. 24. We have heard the rival contentions and perused the record placed before us. Ld. AO observed that the assessee has purchased a flat at Shehnai Residency of Rs. 60,19,920/- and called for the copy of purchases documents but the query remain unexplained. Thereafter before the Ld. CIT(A) assessee filed the details along with proof of taking house loan of Rs. 42,50,000/- for the purchase of flat. Ld. Departmental Representative (DR) failed to rebut the finding of the Ld. CIT(A). 25. We therefore, in the given facts and circumstances of the case, are of the view that the alleged purchase of flat of Rs. 60,19,200/- cannot be categorized under the unexplained investments u/s 69 of the Act as the same have been recorded in the regular books of accounts along with housing loan taken for financing the purchase of the flat. No interference is therefore, called for in the finding of the Ld. CIT(A) de....
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....ed before us. Both assessee and Revenue are in appeal raising in the ground relating to levying of penalty u/s 271(1)(c) of the Act at Rs. 33,50,000/-. Penalty u/s 271(1)(c) of the Act is leviable if the assessee conceal the particulars of income or furnishes inaccurate particulars of income. 34. In the instant appeal part of the penalty is levied on the estimated profits of Rs. 1,08,24,617/- made by the AO by applying net profit rate of 3.5% on the sales disclosed by the assessee. From going through the assessment order it is discernable that Ld. AO rejected the books u/s 145(3) of the Act for not maintaining quantitative records and sales vouchers. No doubt has been raised for the purchase made by the assessee from the Excise Department. It is well established fact that the assessee engaged in the Liquor contractor business have to prepare regular quantitative details to be furnished to the Excise Authority. 35. The regular stock is taken. No anomaly has been found in the audited books of account. Addition has been made only by estimating profits. No adverse finding has been given for any instances which could prove that assessee has concealed income or furnish inaccurate p....