Sardar Imtiyaz Pasha Vs ITO (ITAT Bangalore)
Addition based on unjustified profit estimation & Lack of fair hearing vitiates CIT(A) Order- ITAT remands case to AO for fresh consideration: ITAT Bangalore
Assessee is an individual engaged in fish business & filed original return of income declaring total income of Rs.8,19,530. It was found that assessee has deposited cash of Rs.5,59,00,000 in various bank accounts. As per information & enquiry it was found that assessee is in the business of trading of live fish. He purchases fishes in smaller quantity from fishermen & then transport to different places. From these different places, cash is deposited in the bank account of assessee of sale proceeds. This sale proceeds is Rs.5.59 crores. Order u/s. 148A(d) was passed & notice u/s. 148 was issued. Assessee also furnished reply to the various notices issued. Assessee also submitted copy of the bank account & cash book along with audit report. AO found that the purchase register & sale register are without any details of the PAN of buyers & sellers. The total turnover of Assessee is Rs.11.79 crores, whereas the net profit is only Rs.8.84 lakhs. However, for AY 2022-23 the net profit shown by Assessee is 2.52%. Therefore AO issued a show-cause notice that why for this year also the gross profit of Assessee should not be taken at 2.52% of the turnover. Subsequently, addition of Rs.20,86,690 was made to the total income of Assessee on account of suppressed gross profit. The turnover of Assessee was found to be Rs.11.79 crores on which profit @ 2.52% was estimated amounting to Rs.29,70,880 & as assessee had already shown Net Profit of Rs.8,84,190, a sum of Rs.20,86,690 was added to the total income of Assessee & assessment order was passed on 18.5.2023.
