TaxTMI 
TaxTMI 
2023 (1) TMI 318
X X X X Extracts X X X X
X X X X Extracts X X X X
....these were heard together and are being disposed of by this common order. 2. All the above appeals were earlier dismissed by the Tribunal on the ground that the assessee has opted for Vivad-se- Vishwas Scheme. However, the Tribunal vide order dated 1.7.2022 in M.A. No.84 to 88/Hyd/2022 recalled its earlier order. Hence these are recalled matters. 3. First we take up appeal in ITA No.1073/Hyd/2019 for the A.Y 2011-12 as the lead case. 4. Facts of the case, in brief, are that the assessee is an individual and derives income from liquor business. He filed his return of income on 24.9.2011 declaring total income of Rs.2,14,605/- which was processed u/s 143(1) of the I.T. Act. Subsequently, a search u/s 132 of the I.T. Act was conducted....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e than 18% per annum for the A.Y 2016-17 by the assessee himself. The assessee objected to the same and stated that all the debtors will not pay interest and therefore, such a proposition is incorrect. However, the Assessing Officer did not accept the contention of the assessee and made addition of Rs.1,17,200/- to the total income of the assessee being interest income from sundry debtors. 5. Similarly, the Assessing Officer noted that the assessee has shown net profit of Rs.2,11,063/- which is 2.7% of the total sales of Rs.78,91,440/- from the sale of liquor. The Assessing Officer proposed to adopt the profit @ 8% of the turnover as per provisions of section 44AD on the ground that the assessee has admitted net profit @ 8% in the return....
X X X X Extracts X X X X
X X X X Extracts X X X X
....missioner of Income lax (Appeals) is not legally correct and proper in confirming the addition of Rs.1,17,200/-in Money lending business. 2. Liquor Business The Learned Commissioner of Income Tax (Appeals) is not legally correct and proper in estimating income @5% on Stock put to use. The jurisdictional Income Tax Officer is estimating 3% Net Profit on Stock put to use. The appellant prays for estimating 3% instead of 5%. The appellant craves leave to file additional statement of facts, if necessary, in support of grounds of appeal at the time of hearing." 9. The assessee has also raised an additional ground challenging the validity of the order passed u/s 153C in absence of any incriminating material found dur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve any grievance. 12. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case is engaged in liquor business and did not maintain any books of accounts nor produced any such books of accounts either during the course of search or post search enquiries or during the course of assessment proceedings for which the Assessing Officer estimated the profit at 8% of the turnover. We find the assessee before the Assessing Officer as well as the learned CIT(A) has requested for restricting the profit @5% of the turnover. Under these the circu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....losed any interest income from sundry debtors. We find the Assessing Officer computed such interest @ 18% on the sundry debtors of Rs.6,50,000/- as on 31.3.2011 on the ground that the assessee himself had voluntarily offered interest income from sundry debtors at more than 18% per annum for A.Y 2016-17 and Shri Hema Kumar Reddy, one of the persons of the group, in his sworn statement recorded u/s 131 on 15.3.2017 in his reply to question No.12 had stated that the assessee group charges interest @ 18% p.a. uniformly. While doing so the Assessing Officer rejected the explanation of the assessee that all the debtors are not giving interest and therefore, no interest should be calculated for making addition to the total income of the assessee. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....interest to the assessee. Under these circumstances we are of the considered opinion that the addition of Rs.1,17,200/- being interest @ 18% from sundry debtors of Rs.6,50,000/- as on 31.3.2011 is not justified being added on surmises and presumptions. We, therefore, set aside the order of the CIT (A) on this issue and the grounds raised by the assessee on this issue are allowed. 16. In the result, appeal filed by the assessee is partly allowed. ITA Nos. 1074 & 1077/Hyd/2019 - A.Y 2012-13 & 2015-16 17. The assessee in the grounds of appeal has challenged the addition of Rs.1,66,500/- and Rs.3,15,000/- respectively being interest from sundry debtors for the impugned two assessment years. 18. After hearing both the sides, we find ....