TaxTMI 
TaxTMI 
2022 (9) TMI 865
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No. ITBA/APL/S/250/2022-23/1043252458(1), ITBA/APL/S/250/2022-23/1043252826(1) & ITBA/APL/S/250/2022-23/1043253643(1) dated 30/05/2022 arising out of the orders U/s. 143(3), 147 r.w.s 144 of the Income Tax Act, 1961 [in short "the Act"] for the AY 2016-17, 2017-18 & 2018-19 respectively. 2. Since the issues raised in all the instant appeals are identical, therefore all these three appeals are clubbed, heard together and disposed off in this consolidated order. Accordingly, we take up ITA No.127/Viz/2022 (AY 2016-17) as a lead appeal for adjudication. 3. Brief facts of the case are that the assessee is a coaching institute and gives coaching for all competition exams, filed its return of income for the AY 2016-17 on 29/09/2016 admitting a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....proceedings based on the return filed in response to Notice u/s 148, and considered the remaining amount of Rs.4,33,64,367/- as the total income of the assessee for the AY 2016-17. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee's representative made required submissions with respect to the incomes accepted during the course of survey for the AY 2016-17 and pleaded that the entire gross receipts cannot be taxed. The Ld. CIT(A) considering the submissions and in the absence of any proof provided by the assessee's representative confirmed the addition made by the AO and dismissed the appeal. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rm in a summary manner. 7. For these and other reasons that are to be urged at the time of hearing of the case the appellant prays that the impugned disputed addition is to be deleted in the interest of justice." 5. The Ld. Authorized Representative (Ld. AR) submitted that the assessee being a partnership firm is running a coaching centre from the year 2011. During the survey operations conducted on 26/02/2019 certain unrecorded receipts were found for eight assessment years for which the assessee has accepted the undisclosed receipts in the statement recorded u/s 133A of the Act. The survey team at the time of survey quantified the undisclosed receipts at Rs. 29,49,39,973/-. The Ld. AR further submitted that the assessee admitted an am....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ings, the net profit ratio works out to 16% of the assessed income. The Ld. AR therefore pleaded that the same percentage shall be considered as net profit for the impugned assessment year. Per contra, the Ld. Departmental Representative (Ld. DR) relied on the order of the Revenue Authorities. The Ld. DR also submitted that there was no evidence with respect to expenditure relating to the undisclosed income of the assessee for the relevant assessment year and hence AO has added the entire gross receipts as income of the assessee and considered that all the expenses have been accounted and the only income has not been accounted. The Ld. DR therefore pleaded that the orders of the Revenue Authorities be upheld. 6. We have heard the rival pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... As admitted by the assessee in the sworn statement u/s 133A of the Act, we are of the considered view that certain expenditure must have been incurred by the assessee in earning such undisclosed income which was not accounted by the assessee. We also find from page 126 of the paper book that the assessee has on an average disclosed 8% to 10% on the reported turnover. Further, we also find from the assessment order passed for the AY 2019-20 U/s. 143(3) of the act, the net profit ratio including the reported and unreported incomes worked out to 16% as detailed in page 128 of the paper book. In the absence of evidences for unaccounted expenditure, it cannot be concluded that the entire gross receipts should be assessed as total income. Furthe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s [2007] 165 taxmann 638 (SC) has observed as follows: "It is pertinent to bear in mind that U/s. 4 the levy is on total income of the assessee computed in accordance with an subject to the provisions of the Income Tax Act. What is chargeable to tax under the Income Tax Act is not the gross receipt but the income under the Income Tax Act. The tax is on income but on gross receipts." Respectfully following the judicial precedents and in view of the above discussions, we find that taxing the entire gross receipts, where the Net Profit ratio is at 82.49%, by AO for the relevant assessment year is not justifiable by any stretch of imagination. Similarly the plea of the Ld.AR to adopt the Net Profit ratio of 16% based on the assessment order....