ITO, Trichy V. B.Rajendran, Trichy

ITA 1870/CHNY/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4908 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 30-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S SRIDHAR
• Assessee Lawyers: S RENGA RAJAN
• Keywords: Unexplained cash credit; Rejection of books of accounts; Principle of natural justice
• Section: 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI ( CAMP AT MADURAI ) . . . , ! . '#'$ , % !& ' [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./I.T.A. NO.1730/MDS/2014 / ASSESSMENT YEAR : 2009-2010 SHRI. B. RAJENDRAN, NO.9, II CROSS STREET, THIRUNAGAR, MANACHANALLUR, TRICHY 620 001. VS. THE INCOME TAX OFFICER, WARD I (1) TRICHY ./I.T.A. NO.1870/MDS/2014 / ASSESSMENT YEAR : 2009-2010 THE INCOME TAX OFFICER, WARD I (1) TRICHY VS. SHRI. B. RAJENDRAN, NO.9, II CROSS STREET, THIRUNAGAR, MANACHANALLUR, TRICHY 620 001. [PAN AAGPR 5480B] ( () / APPELLANT) ( *+() /RESPONDENT) ASSESSEE BY : SHRI. S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI. S. RENGA RAJAN, JCIT. /DATE OF HEARING : 15-02-2017 ! /DATE OF PRONOUNCEMENT : 05-04-2017 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THESE ARE CROSS APPEALS FILED BY THE REVENUE AND ASSESSEE RESPECTIVELY DIRECTED AGAINST AN ORDER DATED 06.03. 2014 OF LD. COMMISSIONER OF INCOME-TAX (APPEALS), TIRUCHIRAPALL I. ITA NOS.1730 & 1870/2014 :- 2 -: 2. THESE APPEALS ARE TAKEN TOGETHER FOR DISPOSAL. FACT S APROPOS ARE THAT ASSESSEE ENGAGED IN THE BUSINESS OF SELLI NG AND MILLING PADDY AND RICE HAD FILED RETURN OF INCOME FOR THE IMPUGN ED ASSESSMENT YEAR DISCLOSING INCOME OF @7,37,928/-. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, ASSESSEE PRODUCED BOOKS OF ACCOUNTS BU T FAILED TO SUPPORT THE EXPENDITURE RECORDED IN THE SUCH BOOKS OF ACCOUNTS THROUGH VOUCHERS AND OTHER SUPPORTING RECORDS. LD. ASSESSING OFFICER FOUND THAT AGAINST TURNOVER OF @5,02,65,138 ASSESSE E HAD CLAIMED LORRY FREIGHT EXPENDITURE @51,63,763/-. AS PER LD. ASSESSING OFFICER ASSESSEE HAD RECORDED LORRY FREIGHT EXPENDITURE ON A NUMBER OF DAYS WHERE THERE WERE NO PURCHASES OR SALES. LD. ASSESS ING OFFICER ALSO NOTED THAT LORRY FREIGHT EXPENDITURE CLAIMED CAME T O 11.76% OF THE TOTAL PURCHASES RECORDED BY THE ASSESSEE. AS PER T HE LD. ASSESSING OFFICER, ASSESSEE HAD PURCHASED ONLY 4150.698 TONNS OF PADDY AND RICE. ASSUMING THAT SUCH PURCHASES HAD TO BE TRAN SPORTED OVER AN AVERAGE OF 200 KM, HE WORKED OUT THE POSSIBLE LO RRY FREIGHT EXPENDITURE OF @22,70,431.81. FOR THIS, HE RELIED O N LETTER NO. BSS15700/2100, DATED 10.08.2010 OF SENIOR REGIONAL MANAGER, TNCSC TRICHY REGION, CITING ALL THESE REASONS. HE PROPOSE D A DISALLOWANCE OF FREIGHT EXPENDITURE CLAIMED ON THE DATES WHERE THER E WERE NO PURCHASE OR SALE ACTIVITY. ITA NOS.1730 & 1870/2014 :- 3 -: 3. LD. ASSESSING OFFICER ALSO FOUND THAT ASSESSEE H AD CLAIMED LABOUR CHARGES AT @57,88,443.39 WORKING OUT TO ABOU T 13.18% OF HIS PURCHASES. HE WAS OF THE OPINION THAT OUT OF THIS AMOUNT, @32,52,210/- WAS CLAIMED TO HAVE BEEN PAID ON THE D AYS WHEN THERE WERE NO ACTIVITY. 4. LOOKING AT THE AXIS BANK ACCOUNT OF ASSESSEE, LD. A SSESSING OFFICER NOTED THAT AN OUTSTANDING LOAN OF @1,49,69, 828/- WAS SQUARED OFF FULLY DURING THE RELEVANT PREVIOUS YEAR THOUGH FUNDS RECEIVED FROM ONE M/S. HI-TECH AGRO (P) LTD WHERE ASSESSEE WAS A DIRECTOR. AS PER LD. ASSESSING OFFICER THERE WAS A SUBSTANTIAL INCRE ASE IN SUNDRY CREDITORS, DURING THE RELEVANT PREVIOUS YEAR AND A SSESSEE COULD NOT SUBSTANTIATE SUCH INCREASE. SPECIFIC MENTION WAS M ADE OF A SUM OF @67,07,636/- CLAIMED AS RECEIVED FROM ONE K.V. NAT H. AS PER LD. ASSESSING OFFICER ASSESSEE HAD ALSO ISSUED CHEQUES TO VARIOUS PARTIES AGGREGATING TO @77,87,604/-. BUT THESE WERE ALL SH OWN AS CASH WITHDRAWALS IN ITS CASH BOOK. THIS AS PER THE LD. ASSESSING OFFICER RESULTED IN A CASH DEFICIENCY OF THE LIKE AMOUNT. 5. REPLY OF THE ASSESSEE FOR ABOVE WAS THAT IT HAD TO MOVE THE RICE AND PADDY TWICE, ONE FROM ITS PROCUREMENT CE NTRE TO CENTRALIZED STORING PLACE AND ANOTHER FROM THE CENTRALIZED STOR ING PLACE TO MANACHANALLUR. IN SO FAR AS LABOUR CHARGES ARE CON CERNED, ASSESSEE ITA NOS.1730 & 1870/2014 :- 4 -: STATED THAT IT WAS NOT OWNING ANY RICE MILLS AND IT WAS HOLDING THE PADDY IN PRIVATE RICE MILLS, AND THIS ENTAILED ADDI TIONAL EXPENDITURE FOR LOADING AND UNLOADING. IN SO FAR AS LOAN FROM AXIS BANK WAS CONCERNED, ASSESSEE STATED THAT THIS WAS PAID OUT O F CHEQUES RECEIVED FROM M/S.HI TECH AGRO FOODS LTD, IN SETTLEMENT OF THE DUES FROM THEM. ASSESSEE ALSO SUBMITTED ADDRESS AND PAN NO O F M/S. HI TECH AGRO FOODS LTD. IN SO FAR AS CREDIT FROM K.V. NAT H ARE CONCERNED, ASSESSEE STATED THAT TWO OF SUCH AMOUNTS WERE DIREC TLY CREDITED TO THE BANK ACCOUNT AND NOT SHOWN AS CASH RECEIPTS. IN SO FAR AS CHEQUES ISSUED TO VARIOUS PARTIES WERE CONCERNED, REPLY OF THE ASSESSEE WAS THAT ALL THESE PERSONS WERE HIS STAFF AND EFFECTIVE LY REFLECTED CASH WITHDRAWALS. ALONGWITH ABOVE REPLY, ASSESSEE ALSO GAVE RATIO OF ITS TURNOVER, PURCHASE AND EXPENDITURE OF EARLIER THREE YEARS AND SUBSEQUENT TWO YEARS. 6. HOWEVER, LD. ASSESSING OFFICER WAS NOT IMPRESSED. ACCORDING TO HIM, LORRY FREIGHT CHARGES CLAIMED BY THE ASSESSEE CAME TO 5.63% OF HIS PURCHASE WHICH WAS MUCH HIGHER THA N THE INDUSTRIAL AVERAGE OF 0.65%. HE MADE A COMPARISON WITH THREE OTHER ASSESSEES WHO WERE ENGAGED IN SAME BUSINESS FOR ARRIVING THE AVERAGE RATES. AS PER LD. ASSESSING OFFICER CLAIM OF LORRY FREIGHT EX PENDITURE MADE BY THE ASSESSEE WAS 8.66 TIMES OF THE INDUSTRIAL AVERAGE. COMING TO THE LABOUR CHARGES, LD. ASSESSING OFFICER NOTED THAT IN DUSTRIAL AVERAGE WAS ITA NOS.1730 & 1870/2014 :- 5 -: ONLY 0.30% OF THE PURCHASES AND THEREFORE ASSESSEE S CLAIM OF 1.81% WAS HIGHLY EXCESSIVE. AS FOR SQUARING OFF OF THE LOAN FROM AXIS BANK, LD. ASSESSING OFFICER NOTED THAT PAYMENTS WERE EFFE CTED FROM FUNDS COMING THROUGH INCREASE IN SUNDRY CREDITORS. ACCOR DING TO HIM, SUNDRY CREDITORS AS ON 31.03.2008 HAD GONE UP TO @1,90,76 ,801/- AGAINST AN OPENING BALANCE OF @26,21,532/-. LD. ASSESSING OFFI CER CONCLUDED THAT THERE WAS UNEXPLAINED INCREASE OF SUNDRY CREDITORS TO THE EXTENT OF @1,54,53,021/-. LD. ASSESSING OFFICER ALSO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE FOR CREDIT FROM K.V. N ATH. HE HELD THAT THE SUM OF @67,07,032/- CLAIMED TO HAVE BEEN RECEIV ED FROM K.V. NATH THROUGH RTGS WAS INCORRECT. ACCORDING TO HIM, SUMS AGGREGATING TO @11,75,075/- WERE CASH CREDITS. AS FOR THE CLAIM O F THE ASSESSEE THAT CHEQUES ISSUED IN THE NAME OF ITS EMPLOYEES WERE ON LY CASH WITHDRAWALS, LD. ASSESSING OFFICER WAS OF THE OPIN ION THAT ASSESSEE COULD NOT SUBSTANTIATE THIS. HE WAS OF THE OPINIO N THAT FOLLOWING ADDITION/DISALLOWANCE WERE REQUIRED. SL.NO DESCRIPTION AMOUNT (@) 1 LORRY FREIGHT DISALLOWED 26,92,230 2 LABOUR CHARGES DISALLOWED 32,52,210 3 SUNDRY CREDITORS UNEXPLAINED 1,54,53,022 4 CREDIT FROM K.V. NATH ADDED 67,07,636 5 UNEXPLAINED CASH CREDITS 77,87,604 TOTAL 3,58,92,702 ITA NOS.1730 & 1870/2014 :- 6 -: HOWEVER, AS PER LD. ASSESSING OFFICER, IN ORDER TO ENSURE NATURAL JUSTICE, IT WAS NECESSARY TO NET THE CASH INFLOW W ITH CASH OUTFLOWS. AFTER SUCH TELESCOPING A NET ADDITION OF @2,16,16 ,397/- WAS MADE. 7. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). CONTENTION OF THE ASSESSEE WAS THAT ADDITIONS WERE MADE MERELY ON SURMISES AND PRESUMPTIONS. IN SO FAR AS LORRY FREIGHT CHARGES ARE CONCERNED, A RGUMENT OF THE ASSESSEE WAS THAT THE NATURE OF ITS TRADE WAS NOT C ONSIDERED BY THE LD. ASSESSING OFFICER. ACCORDING TO HIM, IT WAS INCORR ECTLY PRESUMED THAT TRANSPORTATION CHARGES AND FREIGHT EXPENSES WOULD B E INCURRED ONLY ON DATES WHERE THERE WERE PURCHASE AND SALES OF PADDY AND RICE. FURTHER, ACCORDING TO ASSESSEE, LD. ASSESSING OFFICER HAD AL SO NOT CONSIDERED INVOLVEMENT OF SUBSTANTIAL LABOUR IN THE TRADE, WH ERE IT WAS NECESSARY TO LOAD, UNLOAD AND UNPACK A NUMBER OF TIMES, DUE TO STORING, DRYING AND TREATMENT FOR PEST CONTROL. IN SO FAR AS INCRE ASE IN SUNDRY CREDITORS WAS CONCERNED, SUBMISSIONS OF THE ASSESSE E WAS THAT SUCH SUNDRY CREDITORS WERE REPRESENTED BY STOCK @1,56,47 ,575/-. LD. ASSESSING OFFICER HAD TAKEN A WRONG PRESUMPTION THA T SQUARING UP OF LOAN WITH AXIS BANK WAS THROUGH INCREASE IN SUNDRY CREDITORS. FURTHER, AS PER ASSESSEE, DRAWINGS FROM THE BANK ACCOUNT IN DIFFERENT NAMES, WERE ONLY CASH WITHDRAWALS AND SO DONE TO REDUCE TH E BANKING ITA NOS.1730 & 1870/2014 :- 7 -: TRANSACTION TAX. FOR THE LOAN FROM K.V. NATH, SUBM ISSION OF THE ASSESSEE WAS THAT IT HAD GIVEN COMPLETE ADDRESS AND PAN WHICH WERE NOT CONSIDERED BY THE LD. ASSESSING OFFICER. FINALL Y ASSESSEE STATED THAT ADDITIONS MADE BY THE LD. ASSESSING OFFICER WHEN CO NSIDERED IN THE AGGREGATE CAME TO 44.47% OF THE TURNOVER AND IN T HE TRADE OF PADDY AND RICE SUCH HUGE PROFITS WERE NOT POSSIBLE. 8. LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONS IDERING THE SUBMISSIONS OF THE ASSESSEE WAS OF THE OPINION THAT LD. ASSESSING OFFICER HAVING INVOKED SEC. 144 OF THE ACT COULD NO T HAVE PROCEEDED FROM THE PROFITS DECLARED BY THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT, AND MADE DISALLOWANCE AND ADDITIONS. ACCO RDING TO HIM, LD. ASSESSING OFFICER SHOULD HAVE REJECTED THE BOOKS OF ACCOUNTS AND PROCEEDED TO COMPLETE THE ASSESSMENT UNDER THE BES T OF JUDGMENT METHOD. FURTHER, AS PER LD. COMMISSIONER OF INCOME TAX (APPEALS) LOAN FROM AXIS BANK WAS PAID BY THE ASSESSEE THROUG H COLLECTION OF DEBTS DUE TO IT FROM M/S. HI-TECH AGRO (P) LTD. LD. CIT(A) ALSO NOTED THAT ASSESSEE HAD FILED A LETTER OF CONFIRMATION OF K.V. NATH WITH ALL NECESSARY DETAILS AND THE LD. ASSESSING OFFICER HA D NOT FOUND ANYTHING WRONG WITH SUCH DETAILS FURNISHED. RELYING ON THE DECISION OF JODHPUR BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. CHOHTAN CONSTRUCTION CO. 84 TTJ 693 , LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT ADDITIONS RESULTING IN ERRONEO US NET PROFITS NOT ITA NOS.1730 & 1870/2014 :- 8 -: FITTING TO THE TYPE OF BUSINESS CARRIED ON BY AN AS SESSEE COULD NOT BE SUSTAINED. ACCORDING TO LD. COMMISSIONER OF INCOME TAX (APPEALS), ADDITIONS WERE ALL MADE ON WILD ESTIMATES. HE WAS O F THE OPINION THAT FOR ALL THE DISCREPANCIES POINTED OUT, A 5% PROFIT ESTIMATE ON THE TURNOVER OF @5,33,27,788/- WOULD SUFFICE. HE THER EFORE, FIXED THE INCOME OF THE ASSESSEE HAS @26,66,389/- AND DELETED THE BALANCE ADDITIONS. 9. NOW BEFORE REVENUE IS AGGRIEVED ON SUBSTITUTION OF DISALLOWANCE/ ADDITION MADE BY THE LD. ASSESSING OF FICER, WITH A 5% ESTIMATED PROFIT, WHEREAS ASSESSEE IN ITS APPEAL SA Y THAT EVEN THE 5% ESTIMATE OF PROFIT ON TURNOVER WAS ON THE HIGHER SI DE. 10. LD. DEPARTMENTAL REPRESENTATIVE STRONGLY ASSAILING THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) SUB MITTED THAT LD. ASSESSING OFFICER HAD MADE ADDITION FOR LORRY FREI GHT CHARGES AND LABOUR CHARGES CONSIDERING INDUSTRIAL AVERAGE IN TH IS TYPE OF BUSINESS. AS PER LD. DEPARTMENTAL REPRESENTATIVE SUCH INDUST RIAL AVERAGE FOR LORRY FREIGHT WAS 5.63% OF THE PURCHASES AND LABOUR CHARGES WAS 0.30% OF THE PURCHASES. AS AGAINST THIS, ASSESSEE AS PER LD. DEPARTMENTAL REPRESENTATIVE HAD CLAIMED 8.86 TIM ES AND 6.03 TIMES OF THE INDUSTRIAL AVERAGE UNDER THESE HEADS. IN SO FAR AS ADDITIONS MADE FOR SUNDRY CREDITORS WERE CONCERNED, LD. DEPAR TMENTAL ITA NOS.1730 & 1870/2014 :- 9 -: REPRESENTATIVE SUBMITTED THAT ASSESSEE COULD NOT P RODUCE ANY OF THE SUNDRY CREDITORS FOR EXAMINATION. FURTHER AS PER L D. DEPARTMENTAL REPRESENTATIVE CREDIT WORTHINESS OF K.V. NATH WAS NEVER SUBSTANTIATED BY THE ASSESSEE. CONTINUING IN THE SAME VEIN, LD. DEPARTMENTAL REPRESENTATIVE ARGUED THAT ASSESSEE HAD SHOWN CASH WITHDRAWALS ON CHEQUES ISSUED TO EIGHTEEN PERSONS BUT COULD NOT PR OVE THAT THESE EIGHTEEN PERSONS WERE EMPLOYEES OF THE ASSESSEE. T HUS, AS PER LD. DEPARTMENTAL REPRESENTATIVE LD. COMMISSIONER OF IN COME TAX (APPEALS) FELL IN ERROR IN BRUSHING ASIDE ALL THESE HARD EVIDENCE AND ESTIMATING THE INCOME OF THE ASSESSEE AT 5% OF ITS TURNOVER. 11. CONTRA, LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T ESTIMATE MADE BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AT 5% ITSELF WAS ON THE HIGHER SIDE. AS PER LD. AUTHO RISED REPRESENTATIVE ASSESSEE HAD NET PROFIT OF ONLY 1.35% TO 0.75% OVER VARIOUS FINANCIAL YEARS ENDING 31.03.2005, 31.03.2006, 31.03.2007, 3 1.3.2008, AND 31.03.2010. WHILE SUPPORTING THE ORDER OF THE LD. C OMMISSIONER OF INCOME TAX (APPEALS) SO FAR AS IT RELATED TO REJECT ION OF THE METHODOLOGY ADOPTED BY THE LD. ASSESSING OFFICER, L D. AUTHORISED REPRESENTATIVE SUBMITTED THAT ESTIMATE MADE AT 5% O F THE TURNOVER WAS REQUIRED TO BE BROUGHT DOWN ATLEAST TO 2%. ITA NOS.1730 & 1870/2014 :- 10 -: 12. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT DISPUTE D THAT LD. ASSESSING OFFICER HAD INVOKED SEC. 144 OF THE ACT WHILE COMPL ETING ASSESSMENT. WHILE MAKING A BEST JUDGMENT IT IS ESSENTIAL FOR T HE LD. ASSESSING OFFICER TO TAKE INTO ACCOUNT ALL RELEVANT MATERIAL WHICH ARE GATHERED. IT IS AN ADMITTED POSITION THAT ASSESSEE HAD PRODUCED BOOKS OF ACCOUNTS BUT COULD NOT SUPPORT IT WITH EVIDENCE FOR EXPENDIT URE. HOWEVER, FOR THE SQUARING UP OF LOAN TAKEN UP FROM AXIS BANK ASS ESSEE COULD SHOW THAT THESE WERE OUT OF FUNDS RECEIVED FROM M/S. HI- TECH AGRO (P) LTD, FOR SETTLEMENT OF THEIR DUES. IT ALSO NOT DISPUTED THAT ASSESSEE HAD FILED CONFIRMATION LETTER FOR THE LOAN RAISED BY HI M FROM K.V. NATH AND SUCH CONFIRMATION LETTER CONTAINED ADDRESS AND PAN OF THE K.V. NATH. NO DOUBT LD. ASSESSING OFFICER HAD CULLED OUT THE DATA WITH REGARD TO THREE OTHERS TRADERS IN SIMILAR LINE OF BUSINESS FO R COMING TO A CONCLUSION THAT LORRY FREIGHT CHARGES AND LABOUR CH ARGES CLAIMED BY THE ASSESSEE WERE 8.66 TIMES AND 6.03 OF THE INDUSTRIA L AVERAGE. IN OUR OPINION, ALL THIS WOULD ONLY DEMONSTRATE THE UNREL IABILITY OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE. LD. ASSESSING OFFICER HAD NEVER DOUBTED TURNOVER OF THE ASSESSEE. HE HAD PROCEEDED WITH A METHOD OF PICK AND CHOOSE, WHEREBY SUBSTANTIAL PORTION OF FREIGHT CHARGES AND LABOUR CHARGES WERE DISALLOWED. THE PRESUMPTION WHILE MAK ING SUCH DISALLOWANCE WAS THAT SUCH EXPENDITURE WOULD NOT HA VE BEEN INCURRED ITA NOS.1730 & 1870/2014 :- 11 -: ON THE DATES WHERE THERE WERE NO PURCHASE OR SALE O F PADDY/RICE. THIS IN OUR OPINION WAS PURELY A SURMISE. LD. ASSESSING OFFICER HAD PROCEEDED TO MAKE DISALLOWANCES FROM THE BOOKS OF ACCOUNTS THOUGH ASSESSEE HAD NOT PRODUCED ANY EVIDENCE IN SUPPORT O F ANY EXPENDITURE CLAIMED. THUS, THE DISALLOWANCES WERE PURELY ESTIMA TES. WHEN AN ASSESSMENT IS COMPLETED ON THE BASIS OF ESTIMATE IT IS REQUIRED THAT THUS SUCH ESTIMATE IS NOT A WILD ONE BUT ONE WHICH HAS A REASONABLE NEXUS WITH THE AVAILABLE MATERIALS AND CIRCUMSTANCE S. THE ESTIMATE SHOULD BE A BONAFIDE ONE AND BASED ON A RATIONAL TH INKING. THERE CAN BE A DEGREE OF GUESS WORK BUT GUESS WORK CANNOT T HROW UP RESULTS WHERE 44.4% OF THE TURNOVER OF THE ASSESSEE WAS CON SIDERED FOR ADDITION. IN SUCH CIRCUMSTANCES, WE CANNOT FIND F AULT WITH THE DIRECTION OF LD. COMMISSIONER OF INCOME TAX (APPEA LS) TO ESTIMATE THE NET INCOME OF THE ASSESSEE AT 5% OF ITS TURNOVER. AS FOR THE CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE THA T ASSESSEE HAD NET PROFIT RATE OF ONLY 1.35% TO 0.75% OVER A NUMBER O F YEARS, WE ARE OF THE OPINION THAT CONSIDERING THE DISCREPANCIES AND THE FAILURE OF THE ASSESSEE TO SUPPORT THE BOOKS OF ACCOUNTS WITH PROP ER EVIDENCES, THE ESTIMATE OF 5% MADE BY THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) WAS A FAIR ONE. WE DO NOT FIND ANY REASO N TO INTERFERE WITH ITA NOS.1730 & 1870/2014 :- 12 -: THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (AP PEALS). 13. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 5TH DAY OF APRI L, 2017, AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! . '#'$ ) (ABRAHAM P. GEORGE) % / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 5 TH APRIL, 2017. KV &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF