ITO, Ward-10(1), Hyderabad, Hyderabad V. Sri Shiv Kumar Linga, Secunderabad

ITA 1798/HYD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6030 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 28-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: D J ADHIA
• Keywords: Unexplained cash credit; Unexplained investment; Business income; Reassessment proceedings
• Section: 69C; 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1798/HYD/2014 ASSESSMENT YEAR: 2007-08 INCOME-TAX OFFICER, WARD 10(1), HYDERABAD VS. SHIV KUMAR LINGA, SECUNDERABAD. PAN AATPL 2054J (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.J. RAO ASSESSEE BY : SHRI D.J. ADHIA DATE OF HEARING 27-10-2016 DATE OF PRONOUNCEMENT 16-11-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - VI, HYDERAB AD, DATED 26/08/2014, FOR AY 2007-08. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE HAD FILED THE RETURN OF INCOME FOR THE AY 2007-08 DECLARING TOTAL INCOME AT RS. 95,680/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND VI DE ORDER DT. 24.12.2009, THE INCOME OF THE ASSESSEE WAS DETERMI NED AT RS. 47,13,310/-, BY MAKING ADDITION OF RS. 21,80,531/- U/S. 69C FOR THE SUPPLY OF GOLD ORNAMENTS TO A HINDU TEMPLE TRUST, L AS VEGAS, USA AND FURTHER ADDED A SUM OF RS. 24,37,100/- TOWARDS DEPOSITS MADE IN THE BANK DURING THE YEAR. THE ASSESSEE PREFERRED AP PEAL BEFORE THE CIT(APPEALS) AND CIT(A)-VI, HYDERABAD VIDE ORDER DA TED 15/03/2011HAD ALLOWED THE APPEAL OF THE ASSESSEE BA SED ON THE EVIDENCES PRODUCED DURING THE COURSE OF APPELLATE P ROCEEDINGS. THE 2 ITA NO. 1798/H/14 SHIVA KUMAR LINGA DEPARTMENT HAD PREFERRED FURTHER APPEAL BEFORE THE ITAT AND THE ITAT VIDE THEIR ORDER IN ITA NO. 1153 OF 2011 DT. 13.10. 2011, NAVE REVERTED THE ASSESSMENT BACK TO THE FILE OF THE ASSESSING OF FICER, ON THE GROUND THAT THE CIT(APPEALS) OUGHT TO HAVE CALLED F OR A REMAND REPORT ON THE FRESH EVIDENCE FILED DURING THE APPELLATE PR OCEEDINGS. THUS, THE ITAT HAD SET ASIDE THE MATTER TO THE FILE OF TH E AO WITH A DIRECTION TO CONSIDER THE FRESH EVIDENCES SUBMITTED BEFORE TH E CIT(APPEALS) AND DECIDE THE ISSUES IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. IN ACCORDANCE WITH THE DIRECTIONS OF THE ITAT, THE- ASSESSING OFFICER COMPLETED THE ASSESSME NT U/S. 143(3) VIDE ORDER DT. 20.02.2013, BY BRINGING TO TAX AN A MOUNT OF RS. 21,80,531/- U/S. 69C AND RS. 24,37,100/- U/S, 68, W HEREBY THE TOTAL INCOME OF THE ASSESSEE HAD BEEN ASSESSED AT RS. 47, 13,311/- AS HAS BEEN ASSESSED VIDE ORDER U/S. 143(3) DT. 24.12.2009 . ON APPEAL, THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 3. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US RA ISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ID. CIT(A) OUGHT NOT TO HAVE DELETED THE AD DITIONS MADE BY THE AO U/S.69C AND U/S.68 OF INCOME TAX ACT, 196 1.. 2. THE ID. CIT(A) OUGHT TO HAVE SEEN THAT THE SECON D CERTIFICATE DATED 27.09.2010 WHICH WAS FURNISHED BY THE ASSESSE E IS ONLY AN AFTERTHOUGHT TO EVADE TAXATION. 3. THE ID. CIT(A) OUGHT NOT TO HAVE GIVEN CONTENT O F THE RELIEF ON THE ISSUE OF ADDITION MADE U/S.69C OF THE I.T. ACT OBSERVING THAT THE EVEN AFTER LETTERS ARE CONTRADICTORY. 4. THE ID.CIT(A) OUGHT TO HAVE SEEN THAT THE ASSESS EE CHOSE NOT TO FILE ANY INFORMATION CALLED FOR BY THE A.O. DURI NG THE SET-ASIDE PROCEEDINGS THEREBY NOT ALLOWING THE AO TO VERIFY T HE GENUINENESS OF THE INFORMATION CERTIFIED BY THE HIN DU TEMPLE TRUST. 5. THE ID.CIT(A) OUGHT NOT TO HAVE RESTORED TO ESTI MATION OF NET PROFIT @10% AFTER TREATING ENTIRE RECEIPTS AS BUSIN ESS RECEIPT EVEN AFTER ACKNOWLEDGING THAT NO WRITTEN SUBMISSION WERE FILED AND NO EVIDENCES IN FORM OF PURCHASES OF SALES, IN THIS REGARD WERE FURNISHED. 3 ITA NO. 1798/H/14 SHIVA KUMAR LINGA 4. AS REGARDS THE ADDITION U/S 69C OF RS. 21,80,531 /-, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE RECEIV ED USD EQUIVALENT TO INDIAN CURRENCY AT RS. 4,51,469/- FRO M HINDU TEMPLE TRUST, LAS VEGAS FOR PREPARING OF SHANK (CONCH) AND CHAKRA AS PER THE DESIGN GIVEN BY THE SAID TEMPLE TRUST AND FOR W HICH 5% WAS GIVEN TO ASSESSEE AS MAKING CHARGES. THE ASSESSING OFFICE R OBSERVED THAT THE ASSESSEE MADE CONCH AND CHAKRA APPROXIMATELY WE IGHING 2800 GRAMS OF GOLD, FOR WHICH THE ASSESSEE COULD NOT PRO DUCE BILLS FOR PURCHASE OF GOLD. AS SUCH, THE ASSESSING OFFICER RE JECTED THE CLAIM OF THE ASSESSEE FOR THE REASON THAT AS PER THE LETTER DT. 29.11.2009 OF HINDU TEMPLE OF LAS VEGAS, THE ASSESSEE PREPARED TH E FOLLOWING ITEMS, FOR WHICH HINDU TEMPLE OF LAS VEGAS HAD PAID FULL FOR THE MATERIAL AND A SERVICE CHARGE OF 5%. 1. VADRANAM ( APPROX WEIGHT OF 300 GRAMS OF GOLD) WITH EMBEDDED STONES. 2. SHANKU AND CHAKRAM (APPROX. WEIGHT OF 700 GMS. O F GOLD) WITH EMBEDDED STONES 3. ABHAYAHASTHAM AND KATIVALLAMBITHA (APPROX. WEIGH T OF 1.1. KG OF GOLD) 4. NAGAABHARANALU (APPROX. WEIGHT OF 700 GMS OF GOL D). 4.1 THE AO INFERRED FROM THE ABOVE THAT THE ASSESSE E HAD PURCHASED MATERIAL I.E. GOLD FOR MAKING THE ABOVE O RNAMENTS AGGREGATING TO THE WEIGHT OF 2800 GRAMS AND IN THE ABSENCE OF BILLS FOR VERIFICATION ON ACCOUNT OF PURCHASE OF GOLD, AN ADDITION U/S. 69C WAS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GO LD. THE ASSESSING OFFICER THUS, BROUGHT TO TAX THE DIFFEREN CE IN VALUE OF GOLD CALCULATING THE RATE OF RS.940/- PER GRAM AND WORKE D OUT RS. 26,32,000/- BY DEDUCTING THE AMOUNT OF RECEIPTS OF RS 4,51,469/-. SINCE THE ASSESSEE RECEIVED RS. 4,51,469/- FROM LAS VEGAS TEMPLE, THE BALANCE AMOUNT OF RS. 21,80,531/- IS UNEXPLAINE D INVESTMENT IN GOLD. 4 ITA NO. 1798/H/14 SHIVA KUMAR LINGA 5. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAD FURNISHED A COPY OF THE LETTER DT. 27TH SEPTEMBER, 2010, ISSUED BY HINDU TEMPLE OF LAS VEGAS, WHICH DETAILED THAT THE ORDER WAS GIVEN TO THE ASSESSEE AND SERVICE CHARGES OF 5% WERE PAID TO THE ASSESSEE. EXCEPT THIS THE ASSESSEE HAD NOT PRODUCED ANY FURTHER INFORMATION IN RESPECT OF BILLS FOR PURCHASE OF MAT ERIAL I.E RAW GOLD FOR PREPARATION OF THE ARTICLES PLACED FOR ORDER BY HIN DU TEMPLE OF LAS VEGAS. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT THE ASSESSEE, A JEWELLERY MAKER, MADE CERTAIN ORNAMENTS DURING THE YEAR FOR THE NEEDS OF DEVOTEES OF HINDU TEMPLE OF LAS VEGAS, FOR WHICH AN AMOUNT OF RS. 4,51,469/- WAS PAID TO THE ASSESSEE DURING THE YEAR. THE ASSESSING OFFICER IN TERPRETED THE CONTENTS OF THE LETTER DATED 26.11.2009 ISSUED BY H INDU TEMPLE, LAS VEGAS THAT THEY HAVE PAID FOR MATERIAL AND SERVICE CHARGES FOR ORNAMENTS, WITH LIST OF ORNAMENTS ENUMERATED WEIGHI NG 2800 GRAMS. ACCORDINGLY, THE VALUE OF THE JEWELLERY WAS ARRIVED AT RS.26,32,000/- RS. 940/- PER GRAM AND AFTER DEDUCTING THE AMOUNT O F RS. 4,51,469/- AS RECEIVED FROM THE TEMPLE, TREATED THE BALANCE AM OUNT OF RS.21,80,531/- AS UNEXPLAINED INVESTMENT MADE BY AS SESSEE IN PURCHASE OF GOLD OF 2800 GRAMS, FOR THE PURPOSE OF PREPARING THE JEWELLERY, FOR WHICH NO EVIDENCE WAS SHOWN TO HAVE BEEN FURNISHED FOR PURCHASE OF GOLD. HOWEVER, AS PER THE ASSESSEE, THE MATERIAL (GOLD) WAS SUPPLIED BY THE CLIENT (HINDU TEMPLE OF LAS VEGAS) AND WHAT HE RECEIVED IS ONLY THE SERVICE CHARGES: HE SU BMITTED THAT THERE ARE NO SPECIFIC SUBMISSIONS BY THE ASSESSEE IN THIS REGARD EXCEPT RELYING ON THE LETTERS WRITTEN BY THE CLIENT VIZ., THE HINDU TEMPLE OF LAS VEGAS. IN THIS CONNECTION, THE ASSESSEE FURNISH ED OTHER LETTER BY THE TEMPLE SOCIETY DATED 27.09.2010, AS PER WHICH T HE TEMPLE HAS SUPPLIED THE MATERIAL TO MR. SHIVA KUMAR LINGA, THE ASSESSEE, WITH ONLY MAKING / SERVICE CHARGES PAYABLE TO HIM. THE S PECIFIC LANGUAGE 5 ITA NO. 1798/H/14 SHIVA KUMAR LINGA USED IN LETTER DATED 27.09.2010, IS REPRODUCED AS U NDER; 'THE DEVOTEES OF 'HINDU TEMPLE OF LAS VEGAS' HAVE DONATE D MATERIAL AND PAID A SERVICE CHARGE OF 5% TO MR.SHIVA KUMAR LINGA FOR THE ORNAMENTS LISTED BELOW.' 6.1 CIT(A) OBSERVED THAT HOWEVER, THE FACTS REVEALE D THROUGH THE LETTER DATED 26.11.2009, AS RELIED UPON BY THE ASSE SSING OFFICER ARE FOUND TO BE CONTRADICTORY TO THE CONTENTS OF LETTER DATED 27.09.2010. THE MAIN CONTENTS OF THE LETTER DATED 26.11.2009, R UN AS UNDER: 'THESE ITEMS WERE PREPARED BY MR.SHIVA KUMAR (HYDER ABAD, INDIA) AND WAS PAID IN FULL FOR MATERIAL AND A SERV ICE CHARGE @ 5%.' 6.2 THE CIT(A) OBSERVED THAT IT IS ALSO PERTINENT T O MENTION THAT NEITHER THE AMOUNTS NOR THE DETAILS OF PREPARATION OF JEWELLERY ITEMS WERE MENTIONED IN THE CONFIRMATION LETTERS. AS PER THE INFERENCE, AS COULD BE MADE OUT, THE AMOUNTS OF RS. 4,51,469/- WA S PAID BY THE TEMPLE OF LAS VEGAS, DURING THE YEAR UNDER REFERENC E, TOWARDS THE MAKING CHARGES OF JEWELLERY WEIGHING 700 GRAMS, IN THE FORM OF 'SHANK' AND 'CHAKRA', FOR THE DEITY AT, LAS VEGAS T EMPLE. HOWEVER, ON FACTS, THE AMOUNT OF RS. 4,51,469/- DOES NOT REPRES ENT THE CHARGES ALONE, FOR MAKING OF JEWELLERY OF 700 GRAMS, AT THE RATE OF 5%, PRESUMABLY ON THE VALUE OF JEWELLERY. AT THAT RATE THE AMOUNT OF RS.4,51,469/- REPRESENT THE COST OF MATERIAL AS WEL L AS THE MAKING / SERVICE CHARGES. AT THAT RATE, THE AMOUNT OF RS. 4, 51,469/- CANNOT CONSTITUTE CONSIDERATION FOR 2800 GRAMS OF JEWELLER Y WHICH WAS SHOWN TO HAVE BEEN DELIVERED BY THE ASSESSEE TO THE TEMPL E OVER THE PERIOD. UNDER THE CIRCUMSTANCES, IT CAN BE CONCLUDED THAT T HE AMOUNT OF RS. 4,51,469/- REPRESENT THE COST OF MATERIAL REIMBURSE D FOR 700 GRAMS OF JEWELLERY HANDED OVER TO THE TEMPLE DURING THE PERI OD, WHICH MEANS THAT THE SOURCES FOR COST OF MATERIAL USED IN MAKIN G OF JEWELLERY IS SUPPORTED BY THE PAYMENTS MADE BY THE TEMPLE TRUST AND WITH THE BALANCE OF JEWELLERY DELIVERED IN SUBSEQUENT PERIOD , WHERE THE 6 ITA NO. 1798/H/14 SHIVA KUMAR LINGA PAYMENTS FOLLOWED THE DELIVERY, AS SUCH IS NO BASIS FOR THE ASSESSING OFFICER TO PRESUME THAT ENTIRE INVESTMENT OF RS.21, 32,000/-, BEING THE DIFFERENCE BETWEEN THE PRESUMED AMOUNT OF INVES TMENT IN GOLD MATERIAL AND THE AMOUNTS RECEIVED FROM TEMPLE AT LA S VEGAS, CONSTITUTE UNEXPLAINED INVESTMENT. IN VIEW OF THE A BOVE OBSERVATIONS THE CIT(A) HELD AS UNDER: I AM OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER ARRIVED AT CONCLUSIONS ON PRESUMPTIVE BASIS, INSPITE OF THE CLARITY ON FACTS WHERE THERE IS NO EVIDENCE TO SHOW THAT ENTIR E MATERIAL WAS USED FOR MAKING OF JEWELLERY OF 2800 GRAMS, DURING THE YEAR UNDER REFERENCE ALONE. THERE IS NO BASIS TO PRESUME THAT ALL SUCH MATERIAL WAS PURCHASED DURING THE YEAR. FURTHER, TH ERE IS NO CLEAR FINDING ON THE PURCHASE OF MATERIAL BY THE AS SESSEE HIMSELF. ON THESE LINES, THE ADDITION OF RS.21,80,5 31/-, HELD TO BE UNSUSTAINABLE AND ORDERED TO BE DELETED. THIS GROUN D OF APPEAL IS TREATED AS ALLOWED. 7. LD. DR SUBMITTED THAT THE LETTERS SUBMITTED BY T HE ASSESSEE HAVE NO CLARITY AND DO NOT MAKE ANY SENSE. FURTHER, HE RELIED ON THE ORDER OF AO. 8. LD. AR RELIED ON THE ORDER OF CIT(A). 9. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. THE ADDITION MADE BY THE AO IS ON PRESUM PTION AND FULLY RELYING ON THE LETTER DATED 26/11/2009. WHILE LOOKI NG AT THE OVERALL PICTURE, THERE IS NO INFLOW OF FUNDS EXCEPT RS. 4,5 1,469/- FROM US CLIENT AND NO OTHER FUNDS HAD COME IN THE ASSESSEE S ACCOUNT. AT LEAST IT WAS NOT BROUGHT ON RECORD BY THE AO, WE AR E ASKING OURSELVES, HOW ANY ONE WILL INVEST ON THE PROJECT WITHOUT ANY INFLOW OF FUNDS, AS THE ASSESSEE IS ONLY A JEWELLERY MAKER . IN THE ABSENCE OF ANY EVIDENCE OF INFLOW OF FUNDS FROM THE US CLIENT, WE ARE IN AGREEMENT WITH THE FINDINGS OF THE LD. CIT(A) ON TH IS COUNT AND CONFIRM THE DELETION OF THE ADDITION MADE BY THE AO . HENCE, GROUND RAISED BY THE REVENUE ON THIS COUNT IS DISMISSED. 7 ITA NO. 1798/H/14 SHIVA KUMAR LINGA 10. AS REGARDS THE ADDITION OF UNEXPLAINED CASH CRE DIT U/S 68 OF RS.24,37,100/-, IT IS OBSERVED THAT THE ASSESSING O FFICER, ON VERIFICATION OF BANK ACCOUNTS IN TWO BANKS I.E. STA NDARD CHARTERED BANK AND SYNDICATE BANK HAD OBSERVED THAT THERE WER E CASH DEPOSITS OF MORE THAN RS. 20,000/-, WHICH IN TOTAL AMOUNTED TO RS. 24,37,100/-, AS THE ASSESSEE'S AR DURING THE SCRUTINY PROCEEDING S FAILED TO EXPLAIN THE CASH DEPOSITS, THE AO HAD TREATED THE S AME AS UNEXPLAINED CASH CREDIT U/S. 68 OF RS. 24,37,100/-, OF THE ASSESSEE AND BROUGHT THE SAME TO TAX. 11. BEFORE THE CIT(A), THE ASSESSEE FURNISHED THE B ANK ACCOUNT COPIES OF STANDARD CHARTERED BANK AND SYNDICATE BAN K, COPY OF THE ORDER OF ITAT DT. 13.10.2011 AND COPY OF THE ORDER OF CIT(APPEALS) DT. 15.03.2011, AND HAD NOT OFFERED ANY WRITTEN SUBMIS SIONS IN THIS REGARD. 12. THE CIT(A) OBSERVED THAT AS PER THE ASSESSEE, T HE CREDITS INTO BANK ACCOUNT REPRESENT THE PAYMENTS RECEIVED FROM T HE BUSINESS CLIENTS / CUSTOMERS TOWARDS THE COST OF MATERIAL US ED IN MAKING OF JEWELLERY AND THE SERVICE CHARGES, WHEREAS THE DEBI TS REPRESENT THE PURCHASE OF MATERIAL ON BEHALF OF THE CUSTOMERS. HO WEVER, THERE WERE NO EVIDENCES, IN THE FORM OF PURCHASES OR SALES, IN THIS REGARD. EVEN DURING THE APPELLATE AND REASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO FURNISH THE SAME. HOWEVER, FROM THE FACTS OF THE CASE, IT REVEALS THAT THE ASSESSEE IS VERY MUCH INTO THE BUS INESS OF MAKING JEWELLERY BY USING THE MATERIAL/PRECIOUS METALS GI VEN BY THE CUSTOMERS OR BY BUYING THE MATERIAL BY THE ASSESSE E HIMSELF ON THEIR BEHALF. HE OBSERVED THAT THERE IS NO DENIAL OF THE FACT THAT THE ASSESSEE IS IN BUSINESS OF JEWELLERY MAKING AND THE RE IS CONSTANT OUTFLOW OF THE CASH FROM THE BANK ACCOUNT, WHICH FU RTHER CONFIRMS THAT THE ENTIRE CREDITS INTO THE BANK ACCOUNT WERE NOT A VAILABLE FOR THE ASSESSEE, AT THE END OF THE YEAR, SO AS TO BE TREAT ED AS THE UNEXPLAINED INVESTMENTS. THE CIT(A) OBSERVED THAT U NDER THE 8 ITA NO. 1798/H/14 SHIVA KUMAR LINGA CIRCUMSTANCES, IT IS REASONABLE TO HOLD THAT THE E NTIRE CREDITS DO NOT REPRESENT THE INCOME OF THE ASSESSEE, FOR THE YEAR. ALTERNATIVELY, IN ABSENCE OF INFORMATION FORTHCOMING FROM THE ASSESSE E, IT MAY BE PRESUMED THAT THE TOTAL CREDITS REPRESENT THE BUSIN ESS RECEIPTS, ON WHICH ESTIMATION MAY BE MADE TO ARRIVE AT THE PROFI TS EARNED BY ASSESSEE DURING THE YEAR, OR TO ARRIVE AT THE PEAK OF THE CREDITS, FOR THE YEAR. BASED ON THE FACTS OF THE CASE, CIT(A) WA S OF THE OPINION THAT NET PROFIT MAY BE ADOPTED ON THE AMOUNTS OF R S.24,37,100/- BY TREATING THE SAME AS THE RECEIPTS OF BUSINESS, TO A RRIVE AT THE CORRECT PROFITS EARNED BY ASSESSEE FROM HIS BUSINESS/ PROFE SSION. IN VIEW OF THE ABOVE OBSERVATIONS, THE CIT(A) HELD AS UNDER: 6.5. IN ABSENCE OF ANY SPECIFIC INFORMATION AS TO THE RATE OF PROFIT EARNED ON THE TURNOVERS ACHIEVED BY THE ASSE SSEE, IT MAY BE REASONABLE TO ESTIMATE THE NET PROFIT AT 10% OF THE GROSS RECEIPTS, WHICH ALSO INCLUDE THE MAKING CHARGES REC EIVED, BY THE APPELLANT. IN THIS LINE OF BUSINESS, SUCH RATE OF EARNING APPEARS REASONABLE AND SUCH ESTIMATION MAY MEET THE JUSTICE AT BOTH THE ENDS. THUS, THE ASSESSING OFFICER IS DI RECTED TO ADOPT THE FIGURES OF RS.24,37,100/- AS BUSINESS REC EIPTS AND ESTIMATE NET PROFIT @ 10% ON SUCH RECEIPTS TO ARRIV E AT THE INCOME OF THE ASSESSEE. ON THIS GROUND, THE APPEAL IS TREATED AS PARTLY ALLOWED. 13. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL FACTS ON RECORD. THE ASSESSEE MADE CASH DEPOSITS TO THE E XTENT OF RS. 24,37,100/- BUT COULD NOT SUBSTANTIATE THE DETAILS OF SUCH DEPOSITS. SINCE THE ASSESSEE IS DEALING IN THE JEWELLERY MAKI NG BUSINESS AND NO OTHER SOURCE OF INCOME WERE TRACEABLE IN HIS ACC OUNT, ALSO THERE ARE DEPOSITS AND WITHDRAWALS IN THE BANK ACCOUNT. HENCE, WE AGREE WITH THE FINDINGS OF LD. CIT(A) THAT THE DEPOSITS C OULD BE THE BUSINESS RECEIPTS AND PROPER TO BRING ONLY THE PROFIT OF BUS INESS TO TAX. THE RATE OF PROFIT PROPOSED BY THE LD. CIT(A) IS ALSO F OUND TO BE REASONABLE, WE CONFIRM THE FINDINGS OF LD. CIT(A) A ND ACCORDINGLY DISMISS THE GROUNDS RAISED BY THE REVENUE IN THIS R EGARD. 9 ITA NO. 1798/H/14 SHIVA KUMAR LINGA 14. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 16 TH NOVEMBER, 2016 KV COPY TO:- 1) ITO, WARD 10(1), ROOM NO. 516, BLOCK A, 5 TH FLOOR, IT TOWERS, AC GUARDS, HYD. 2) SRI SHIV KUMAR LINGA, PLOT NO. 18, PAIGAH COLONY , SHIV NILAYAM, SP ROAD, SECUNDERABAD. 3) CIT(A) - VI, HYDERABAD 4 CIT - V, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE