CALORIES COUNT ,JALANDHAR V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1, JALANDHAR

ITA 43/ASR/2024

AI Insights

The case involves Calories Count, a partnership firm engaged in food delivery, which appealed against the order of the CIT (Appeals)-5, Ludhiana, sustaining the AO's estimation of gross receipts for the assessment year 2019-20. The AO estimated the gross receipts at Rs. 1.87 crores based on impounded documents and statements from a survey conducted under section 133A of the Income Tax Act, 1961. The assessee contested that the estimation was unjustified as no incriminating documents were found during the survey, and the books of accounts maintained were not considered by the AO. The Tribunal examined the submissions, the impounded materials, and the statements recorded during the survey, ultimately upholding the AO's estimation but adjusting the profit rate for tax purposes.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773773 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2019-2020
• Appeal Filed On: 05-02-2024
• Other Referred Cases: CIT vs Flexi Pack, CIT vs OM Overseas, CIT vs Anil Kumar, TM Triveni Pharma v. Income Tax Officer, Asstt. Commissioner of Income Tax, Range 10(1) v. ITD Cementation Indian Ltd., Income Tax Officer, Ward 2(5), Rajkot v. Girish M. Mehta, Pooranchand Agarwal v. Deputy Commissioner of Income Tax ITAT, Raipur Bench, Commissioner of Income Tax v. Nuchem Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Additional evidence; Unexplained expenditure; Principle of natural justice; Assessment record
• Section: 143(3); 234B; 133A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (HYBRID COURT) BEFORE SH. MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 Calories Count 990, Rajput Nagar, Model House, Jalandhar 144003, Punjab [PAN: AAMFC 3583A] (Appellant) Vs. D.C.I.T., Central Circle-1, Jalandhar (Respondent) Appellant by Respondent by : : Sh. Y. K. Sud, C.A. Sh. Sunil Kumar Yadav, CIT-D.R. Date of Hearing Date of Pronouncement : : 23.07.2025 08.09.2025 ORDER Per Udayan Dasgupta, J.M.: This appeal is filed by the assessee against the order of the ld. CIT (Appeals)- 5, Ludhiana dated 05.12.2023 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the order of the DCIT, Central Circle-1, Jalandhar passed u/s 143(3) of the Act, 1961 dated 27.09.2021. Printed from counselvise.com 2 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 2. Grounds of appeal taken by the assessee in Form No. 36 are as follows: “1. That the CIT (A) was not justified in sustaining the action of the AO of estimating the gross receipts of Rs. 18720000 against the receipts of Rs. 8734799 declared in audited P&L account of the assessee. 2. That both CIT (A) and AO failed to appreciate that a survey took place on the business premises of the assessee during the year, but no incriminating document or cash was found which could lead to estimation of higher receipts. 3. That CIT (A) failed to appreciate that AO neither pointing out any mistakes in the books of accounts nor have rejected the books of account which could lead to estimation of income. 4. That CIT (A) failed to appreciate that estimation of receipts have been made on conjectures & surmises without bringing on any fact on the record. 5. That the CIT (A) again failed to appreciate that if there were any un-recorded sales or the receipts were to be estimated only the net profit arising out of those receipts could have been brought to tax and not the entire receipts as done by the AO. 6. That both CIT (A) and AO failed to appreciate that a survey took place at the business premises of the assessee and on the basis of survey it was agreed upon that the assessee would declare income of Rs. 15.00 Lacs before charging salary to the partners. The AO, therefore, was not justified in making furthers baseless additions. 7. That the CIT (A) further failed to apply his mind on the written submissions of the assessee and relied upon the submissions of the 40 without giving on opportunity to the assessee to rebut the same. 8. That the CIT (A) has hurriedly decided the appeal of the assessee in the most prejudicial manner which is against the natural justice. Printed from counselvise.com 3 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 9. That the CIT (A) failed to appreciate that penalty proceedings u/s 270A have been wrongly initiated and interest u/s 234A, 234B and 234C have been wrongly directed to be charged by the AO. 10. That the order of CIT(A) and AO are against the Law and Facts of the case.” 3. Brief facts emerging from records are that the assessee is a partnership firm (PFAS) and is engaged in the business of preparing and delivering food (break-fast, lunch and dinner) to its fixed customers (clients) on daily basis at client residence. During the course of survey u/s 133A of the Act, on 18th Jan., 2019,at the business premises, various documents and digital data’s were found and impounded(earmarked as Annexure C-1, C-2 and C-3, which are receipt books reflecting receipts from clients) along with two laptops and pen drive, belonging to the assessee firm and statement of Sh. Arun Sharma, (partner)of the assessee firm, present at the premises, was recorded, and the maintenance of regular books of accounts by the assessee was factually denied and no books has been produced before the survey team for examination in course of survey and none found at the premises either. 4. Subsequently, return of income was filed by the assessee along with copies of audited accounts (without TAR and not u/s 44AB),disclosing a net profit of Rs.7,00,122/-(after claim of partners remuneration )on a total turnover of Rs. 87.34 lakhs for the year under appeal, (which works out to eight percentage of disclosed Printed from counselvise.com 4 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 sales),and the same was taken up for scrutiny vide notice u/s 143(2) of the Act, where books of accounts were produced, with the explanation that the same could not be produced before the survey team because the said books were lying with the accountant on the date of survey. 5. During the course of assessment proceedings, various queries were raised and information called for vide notice u/s 142(1), has been responded to with detail particulars, explaining the nature of business activities, has furnished details of sales, expenditure relating to direct and administrative expenses, details of salary and wages and details of bank transactions and other particulars as called for and produced books of accounts, in support of its return and submitted that the returned income be accepted. 6. However, the main dispute in this case has arisen due to the fact that the gross sales disclosed by the assessee in its audited books of accounts (now produced before AO), does not match with the gross sales reflected in impounded documents (Annexure C-1, C-2, and C-3) which are receipt books and reflects receipts of Rs.15,000/- per month per client. On examination of the particulars contained in the impounded documents, e.g. digital data consisting of impounded lap-top, pen drive back up, etc. various ms-word and ms-excel files, financial statements were recovered, in the form of master sheet -data , comprising the name of all clients, type Printed from counselvise.com 5 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 of diet (veg and non – veg) supplied and even the names of drivers specifically entrusted for delivery of such meals, were all found recorded and the average number of clients (customers)were between the figures 100 and 110 clients, daily. 7. Now the question that crops up at this stage, is the degree of reliability and credibility of such recorded figures emerging from the impounded digital records (impounded documents).One of the two partners , present at the premises, Mr. Arun Sharma, accepted the fact that no regular books of accounts are maintained ( Q-21 page 11)and naturally none could be produced before the survey team and he further explained (question no. 35 page no. 155), that the assessee has got total employee strength of 26 ( twenty six ) heads, for running the business and the food preparation is done by one Mr. Harmanpreet Singh, employee ( the chief cook of the assessee), who was also examined, and he has admitted during survey that he prepares meals for 100 and 105 people daily, purchases of raw materials , vegetables, consumable goods, stores are done by the owners and are delivered to the cook from the store room for preparation , and subsequent delivery of cooked food from the kitchen are done by separate delivery boys, (sample of the impounded documents and relevant part of the statements are made a part of this order). Relevant deposition of the cook is as under: Printed from counselvise.com 6 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 8. During the course of assessment proceedings, the books of accounts produced by the assessee were verified vis a vis the contents of the impounded documents, but the assessee was unable to corroborate the contents of entries in the digital data with the figures reflected in the books of account (now produced for examination), specially regarding gross sales/receipts, which presumably points towards suppression of gross turnover. 9. The relevant portion of the impounded documents (contained in the digital data) are reproduced along with the relevant part of the partners explanation (for ready reference): Printed from counselvise.com 7 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 Printed from counselvise.com 8 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 Printed from counselvise.com 9 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 Printed from counselvise.com 10 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 10. The AO has further drawn reference to the impounded “attendance register” and daily patient sheets maintained in respect of Adi Brahma Educom Services Pvt. Ltd (an associate entity)separately assessed to tax, where average monthly patients are recorded at 122 (one hundred twenty two ) and as admitted by the partner, 15% (fifteen percentage ) of the said patients are not taking diet from the assessee firm (calorie count ) and after allowing reduction of 15%, the figures works out to roughly 104 (one hundred four clients)for the assessee, which again corroborate with the statement given by the head cook in his statement recorded during survey. 11. For all practical purpose the AO has arrived at a figure of 104 clients (customers) (one hundred and four clients) based on the excel master data reflected in impounded lap top, which is corroborated with the statement of the head cook (recorded during survey) and further corroborates with the impounded “attendance register”, which again was voluntarily admitted by the partner ( all matching toto) , which cannot be out rightly discarded as “hypothetical and based on estimation”. 12. Now, in order to arrive at the gross collection in terms of receipts the AO has relied upon impounded receipt book (Annexure–C-1,C-2 and C-3) and the declaration by the partner Mr. Arun Sharma (partner) (during survey to question – 10) that charges per client per month is Rs.15,000/- (Rs. Fifteen thousand) which again is corroborated by the impounded money receipt issued in the name of one ‘ Printed from counselvise.com 11 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 DimpleBhatia”(alleged to be part of impounded documents and also made a part of the remand report ). 13. The AO arrived at the gross receipts of Rs.1.87 crores (104 X 15,000/- X 12months) and after deduction of expenses as claimed in the return (profit and loss A/c) amounting to Rs.41.29 lakhs, has arrived at a net business income of Rs.1.45 crores and completed assessment accordingly. 14. The matter was, carried in appeal and fresh evidences were filed along with application u/r 46A of the IT Rules’62, against which remand report was obtained and opportunity of rejoinder provided to the assessee without any satisfactory response. 15. In first appeal proceedings the assessee submitted his version of the calculation as reflected in his audited books of accounts and argued that all factual aspects of the business are duly recorded in the books of accounts, supposed to be regularly maintained, by the accountant (but not found in course of survey hence not impounded ) and as per his books of accounts the total receipts on sales is Rs.87.34 lakhs (excluding GST), against which net profit (after all deductions) has been disclosed at Rs. 7.01Lakhs . 16. The assessee explanation is also reproduced for ready reference: Printed from counselvise.com 12 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 Printed from counselvise.com 13 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 17. The, the ld. first appellate authority has considered all the submissions filed by the assessee and also the impounded documents, the remand reports and the entire facts of the case and has also called for and examined the assessment records, thereafter, he has dismissed the appeal by observing as follows: (observation of Ld. First appellate authority): “7.2.4 I have considered the reasoning given by the AO in assessment order, remand report, submissions & documents submitted by the appellant, facts of the case and legal position. I have also called for the assessment record and examined the same. There is only one addition made by the AO, which is working of net profit on the basis of material impounded during survey u/s 133A of the Act. The appellant has challenged that addition. The key issues raised by the appellant either during appellate proceeding or during assessment proceedings, comments of the AO and the decision of the undersigned is being discussed as under: 7.2.4. Issue of estimation of receipts (ground no. 2) Appellant's submission: In grounds no.2 the appellant has taken a ground that the estimation of the receipt has purely been made on the assumption and presumption without pointing out any defect in the audited accounts. Summary of the submission made by the AR has been reproduced in paragraphs 6 and 6.1. A summary of these have been discussed in paragraph 7.2.1 above. It has also cited certain case laws as well. AO's comments: In the assessment order and in subsequent remand report, the AO has clearly mentioned that (i) As per Q. No. 21 of statement of Sh. Arun Sharma, partner of the appellant firm, recorded during survey, no books of accounts were maintained. (ii) No books of accounts were produced during survey. Printed from counselvise.com 14 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 (iii) In one sample case of one patient Smt. Dimple Bhatia, Copy of the receipts filed by the assessee appears to be a non-genuine document, as the amount in one of the receipts claimed to be received from the patient Smt. Dimple Bhatia does not commensurate with the amount in the receipt in the impounded document. The amount of Rs. 10,000/- is being shown in the receipts as a part of additional evidence filed by the assessee whereas the amount of Rs.15,000/- has been shown in the receipts which forms part of impounded documents. (iv) In another sample case of another client Sh Chander Sheikher, as per attendance register, he continued to have diet in subsequent months as well, whereas the claim of appellant was that he did not continue in subsequent months, (v) The receipt books impounded during the survey as Annexure C-1, C-2 & C-3 show receipt of Rs. 15,000/-per month per client and from the digital data the excel sheets are the 'Master Sheet' comprising of name of the client, type of diet (veg/Non-veg), drivers assigned for delivery. (vi) During the survey, in his statement, partner of the assessee at Ques. no-35 mentioned that there are 26 staff in total working for M/s Calorie Count which is again indicator of the quantum of client of the assessee. (vii) Sh. Harmanpreet Singh, employee of M/s Calories count working as a cook also admitted in his statement on oath which was recorded during thecourse of survey proceedings that he prepared food for 102 to 105 people diet on daily basis. Decision: (1) On the basis of above facts, it is clear that AO has discussed in detail, the defects in the books of account. AO has clearly mentioned it was admitted by the key partner Sh Arun Sharma that books of account are not maintained. Also, these books of account were not found during survey. (ii) Subsequently, AO has worked out the receipts and net profit on the basis of the impounded material. While doing so, AO has been reasonable enough to give benefit of 10- Printed from counselvise.com 15 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 15% of clients not opting for diet with Calorie count, simply on the basis of the statement of the key person Sh Arun Sharma. (iii) Thus, the AO has followed a consistent approach. He has considered the statement of the key person Sh Arun Sharma not in piecemeal but in its entirety. This statement coupled with the impounded material forms a proper base, of not accepting the results filed by the appellant in its return of income, but to work out the same on the basis of impounded material. (iv) During assessment proceeding the appellant has simply mentioned that \"The books of accounts are duly maintained by the assessee and those were lying with the accountant at the time when the survey was conducted. Sh Arun Sharma is not a man of accounting. He looks after marketing primarily. His reply to question as to 'no books of accounts found/maintained by the assessee primarily related to the former part of the word 'found' and not to the latter part 'maintained. He therefore means to say that the books of accounts are duly maintained but they are not found in the premises at the time of survey because they were lying with the accountant at that point of time. He did not know the technicalities between found and maintained and more particularly when a person was under mental pressure that he has been surveyed by the revenue authorities.\" This submission of the appellant is not acceptable as had the books of account been maintained, those would have been found during physical verification at the time of survey. Has it been with the accountant, the appellant would have mentioned it at the time of survey, as any person of ordinary prudence would do. For that, one need not be expert of accounts. Secondly, the appellant has taken this plea first time vide its reply dated 23.09.2021, whereas the survey was conducted on 18.01.2019. le, after one year and eight months (around twenty months) that too at the fag end of assessment proceedings. Even during assessment proceedings reply dated 26.5.2021 was filed and there was no mention of this aspect in that reply as well Therefore, this submission of the appellant is just an afterthought and can be accepted to be a genuine explanation. Thirdly, as per appellant submission during assessment proceeding, there is only oneplace of business. Therefore, books of account would be kept at that place only. However, during survey these books of Printed from counselvise.com 16 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 account were not found. It fortifies the conclusion of the AO that there were no books of account maintained. No submission on this issue was filed due. 18. Grounds 1 to 6 , raised in the appeal memorandum are interlinked and concisely it relates to three issues and in course of hearing before the tribunal the Ld. AR of the assessee has retreated the same arguments which has been made before the first appellate authority and relied heavily on the calculations of gross sales derived from his books of accounts (now produced before the AO), and submitted that these books are actual books, regularly maintained, in course of business, and are supported by money receipts (collections) made from various clients (but strangely the figures of which does not match with the impounded receipts) and argued on three aspects of the matter, firstly, the books of accounts now produced before the AO has not been specifically rejected by the AO u/s 145(3), and consequently the book results are to be accepted and secondly, he argued that even if books produced are not considered as sacrosanct , then the assessment should be completed by adopting a fair rate of business profits on gross sales, commensurate with the nature of business carried out by the assessee and thirdly, he argued that in the instant case the AO has estimated the sales and made additions only on the basis of statement recorded in course of survey and referred to the Hon’ble Madras High court judgment in the case of Kader Khan where the Hon’ble court has observed that statement recorded at the Printed from counselvise.com 17 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 time of survey cannot be made basis for making an addition without any material found. (300/ITR 157 (Madras H.C.). 19. He relied on various judicial decisions that without rejection of books, the book results are to be accepted and estimation cannot be done without rejection of books and specially in cases where no defects are found out from the books produced during assessment by the AO, there are no reasons as to why estimation will be resorted to. 20. Some of the decisions relied upon by the assessee are as follows: “CIT vs Flexi Pack 319 ITR (statues): no estimation without rejection of books maintained properly in regular course, CIT vs OM Overseas 315 ITR 185 (Punjab and Haryana HC): Additions deleted on the ground that no specific defects in books of accounts pointed out by AO. CIT vs Anil Kumar ,386 ITR – 702 ( KarnatakaHC ): No rejection of accounts , income cannot be estimated.” 21. Other case laws relied upon by the assessee: “1. TM Triveni Pharma v. Income Tax Officer [2005] 92 ITD 123 (JP) 2. Asstt. Commissioner of Income Tax, Range 10(1) v. ITD Cementation Indian Ltd. [2014] 146 599 (Mum). 3. Income Tax Officer, Ward 2(5), Rajkot v. Girish M. Mehta [2007] 105 TTD 585 (Rajkot) Printed from counselvise.com 18 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 4. Pooranchand Agarwal v. Deputy Commissioner of Income Tax ITAT, Raipur Bench [2022] 216 TTJ (Raipur) 507 5. Commissioner of Income Tax v. Nuchem Ltd. [2015] 371 ITR 164 (P&H).” 22. Relying on the above judicial pronouncements, the Ld AR prayed for deletion of the addition and for acceptance of the returned income on the ground that no defects has been pointed out in the books produced and assessment based simply on the basis of statement or declaration during survey has little value and the AO has not specifically rejected the books produced and as such no estimation is warranted in this case. 23. The Ld DR relied on the order of the first appellate authority and submitted that the AO was right in working out the receipts on the basis of impounded material after discussing the non-availability of books of account at the time survey and pointing out specific defects in books produced for examination in as much the very figures and quantum of receipts from clients (customers) as reflected in impounded Annexures C-1, C-2, & C-3, does not match with the receipts recorded in cash book produced and this proves beyond doubt that the books now produced are prepared (post survey), and based on duplicate receipts and it is a clear case of suppression of gross sales, and does not reflect the correct financial state of affairs of the business concern. He further argued that the books and supporting receipts, now being Printed from counselvise.com 19 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 produced are not a part of the impounded documents and these documents never existed ante survey (but has been prepared post survey) and naturally the book entries does not match with entries in impounded excel sheets neither in terms of monetary value nor in terms of number of customers. He further argued that the books maintained in the computer system at the premises in course of regular business (in laptop )are the actual books of accounts and the same has been admitted to have been maintained by the assessee himself, de die in diam and depicts the correct turnover and absolutely matches on all counts , including the statement of the partner himself in course of survey, and also with statement issued by the head cook viva voce, with the entries with the receipt books impounded and also with the books of its associate (Adi Bharma). He further submitted that books of account (prepared post survey) are all dressed up books on the basis of which return was filed and it does not reflect the true and correct picture of the business and has got little validity and for all practical purpose the book results are rejected by the Ld first appellate authority where he has referred to the sample cases ( of Dimple Bhatia and Chander Sheikher), duly supported by various impounded material and statements recorded. Even for academic purpose, it clearly establishes the fact that the AO has de facto rejected the books of account. 24. The Ld DR further submitted that the claim of the assessee that all expenditure relating to the business are not included in the impounded documents is also not true Printed from counselvise.com 20 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 considering the fact that the AO has considered the entire impounded materials in totality and worked out the receipts accordingly, the appellant has also not pointed out a single instance of unaccounted expenditure in the impounded materialand under the circumstances and the submissions of the Ld AR of the assessee cannot be considered posteriori. 25. The Ld. DR further argued that regarding the issue of disclosure during survey that the assessee will be disclosing a total income of Rs.15 lacs before partners, interest and salary, he countered that the statement of the AR is just ipse dixit and cannot be accepted as full and final, considering the fact that the AO has worked out the entire sale proceeds , on the basis of excel sheets (impounded documents)person wise to whom food has been supplied which perfectly matches with the impounded annexures C-1, C-2, & C-3. Moreover, copies of impounded materials, were already provided to the assessee beforehand on request, but the same could not be controverted with evidence and as such, the estimation of gross turnover made by the Assessing Officer on the basis of impounded documents were rightly upheld by the ld. first appellate authority, and he prayed for upholding the appellate order. 26. We have heard the rival submissions and considered all materials on record and we find that this is a case where the AO has materials in his possession found at the business premises and taken into custody (in form of impounded documents) Printed from counselvise.com 21 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 consisting of money receipts (annexures–C-1, C-2, & C-3), attendance registers, lap top and pen drive ( containing master sheet data of 105 customers), and statement given by the partner Mr. Arun Sharma explaining the nature of business, number of customers served and has also given break up of receipts (bonafide) for the asst years 2017-18, 2018-19 and also for the assessment year 2019-20 (under appeal) as Rs.4 lakhs to 5 lakhs per month till August 2018 and Rs.12 lakhs to Rs.13 lakhs per month from September 2018 onwards (page -5 of assessment order ) , and these figures are also matching with the contents of the impounded materials as discussed by the AO , and are fully corroborated on all counts , and as such the assessment based on statement recorded are supported in toto by impounded documents and cannot be simply brushed aside as irrelevant . 27. In the instant case we also attach great importance to the statement of the head cook Mr. Harmanpreet Singh, recorded during survey who has categorically stated that he is preparing food for 100 to 105 (one hundred to one hundred five) people per day. If we look at the entire factual aspect of the matter , we find that the cook is not in any way connected with the financials of the concern , he is not aware as to what is contained in the attendance register, he is totally unaware as to the existence of entries in digital records in the lap top , and is not at all aware as to the inflow and outflow of funds or collection through money receipts which might have been recorded in the Annexure C-1, C-2, & C-3 but for all practical purpose, he is the Printed from counselvise.com 22 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 operational employee ( or line employee ) who directly focus on the operational aspects of the business and performs the core activity, that directly contribute to the firms main purpose and revenue generation, and his statement disclosing actual figures of clients ( customers ) for whom cooking is regularly done, is made in good faith (bonafide) and absolutely matches with the figures recorded in digital data , and fully corroborate with other impounded materials, including the statement of the partner and is of vital importance. 28. As such we are of the opinion that the impounded materials (containing the annexures), the digital data (master sheet), statement of the partner (Mr. Arun Sharma ) recorded on the date of survey regarding yearly collections and the statement of the master cook( the operational employee ) , all align together and form a perfect square, which does not corroborate with the entries in the books of accounts ( subsequently produced before the AO ) and the said book figures as held by the Ld first appellate authority, cannot be relied upon, and we also are of the same opinion and we hold that there has been suppression of gross sales (receipts) from carrying out of the business which has remained undisclosed in the return filed. 29. We also hold that all the judicial decisions relied upon by the Ld AR of the assessee in his written submissions are all distinguishable on facts, in as much in the instant case, suppression of sales has been detected and worked out from impounded Printed from counselvise.com 23 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 materials in possession of the AO and the statement of the partner himself fully corroborates with the contents of such material. The judicial decisions cited by the AR has been categorically distinguished by the Ld. first appellate authority in his order (page – 43 to 46, (para 7.2 to para 7.2.4.3), and we are fully agreeable to the said opinion of the appellate authority. 30. As such in the instant case we uphold the gross sale figure arrived at by the AO at Rs. 1.87 crores and now proceed to look into the aspect as to the fair rate of profit which might be earned by the assessee (as agitated in ground no – 5 by the assessee). 31. We take note that the assessee in regular return has declared a profit rate of 8% on disclosed sales of Rs. 87.34 lakhs (and no tax audit exists u/s 44AB) , which points to the fact that the assessee for all practical purpose has declared his intention to be assessed under the presumptive scheme of section 44AD(4) of the Act, and in the instant case , we have not accepted the un-authentic book figures produced by the assessee and has already upheld the determination of gross sales of the assessee from carrying out of an eligible business u/s 44AD(6)(b)(ii) at Rs.1.87 crores, we direct the AO to calculate the business profit @ 8% ( eight percentage of Rs.1.87 crores ), (instead of the assessed income Rs.1.45 crores) and the assessee will get consequential relief on this ground. Printed from counselvise.com 24 I.T.A. No. 43/Asr/2024 Assessment Year: 2019-20 32. Ground no 7 and 8 taken by the assessee are out of context and hence dismissed. 33. Ground no 9: on penalty is pre mature and interest is consequential, and needs no adjudication hence dismissed. 34. Ground 10 is by way of additional grounds, none taken by the assessee, dismissed. 35. In the result, the appeal filed by the assessee is partly allowed as indicated above. Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 08.09.2025. Sd/- Sd/- (Manoj Kumar Aggarwal) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T True Copy By Order Printed from counselvise.com "