Narayan Hati, Cuttack V. ITO, Cuttack

ITA 195/CTK/2012

• Counselvise Citation: 19522114 RSA 2012
• Duration Of Justice: 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 19-03-2012
• Court: TRIBUNAL
• Department Lawyers: A BHATACHARJEE
• Assessee Lawyers: J M PATTNAIKAR
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 195/CTK/2012 (ASSESSMENT YEAR 2008 - 09) SHRI NARAYAN HATI, AT: MERIA BAAR,BUXI BAZAR,DIST. CUTTACK. PAN: AAUPH 0104 J VERSUS ITO, WARD 2(3), CUTTACK. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI J.M.PATTNAIK,AR FOR THE RESPONDENT SHRI A.BHATACHARJEE, DR DATE OF HEARING : 04.04.2012 DATE OF PRONOUNCEMENT : 04.04.2012 ORDER SHRI K.K.GUPTA, AM : THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) CONFIRMING THE PURPORTED CASH CREDITS BROUGHT TO TAX UNDER THE PROVISIONS OF SECTION 68 OF THE I.T.ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) IN ASSESSING OFFICERS ORDE R PASSED U/S.144 OF THE ACT ON 31.12.2010. THERE IS ANOTHER ISSUE WITH RESPECT TO ESTIMATION OF INCOME ON PERCENTAGE WHICH ON THE BASIS OF FACT FINDING BY THE ASSESSING OFFICER OUGHT TO HAVE RESULTED IN LOWER INCOME NOT TO BE CORRELATED WITH THE PURPORTED INTRODUCTION OF CAPITAL ETC., DURING THE COURSE OF THE FINANCIAL YEAR WHEN THE SAME HAS BEEN RENDERED TO TAX AS PER THE GROSS RECEIPTS ACCEPTED BY THE ASSESSING OFFICER. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE IS AN INTERIOR DECORATOR AND ENGAGES HIMSEL F FOR RENDERING CONTRACT WORK FOR BANK S INTERIOR DECORATION FILED RETURN OF INCOME AT 1,09 ,840 CLAIMING REFUND OF 70,607. NOTICE FOR PROCEEDINGS U/S.143(3) WAS ISSUED AND THE ASSESSEE WAS ASKED TO EXPLAIN THE RECEIPTS FROM VARIOUS BANKS WHO HAD GOT THEIR INTERIOR DECORATION WHEN IT WAS FOUND OUT THAT THE BANKS RENDERED PAYMENTS TO THE A SSESSEE IN THEIR BRANCH WHICH INTERIOR DECORATION WAS CARRIED OUT BY THE ASSESSEE. ACCOUNTS OF THE FOUR BANKS WERE NOT DISCLOSED WHEN THE BALANCES THE R E IN WAS TO BE ITA NO.195/CTK/2012 2 EXPLAINED BY THE ASSESSEE WHO OPTED TO RECOMPUTE THE GROSS RECEIPTS ON THE BASIS OF CREDIT SUMMATIONS OF THOSE ACCOUNTS. THE ASSESSING OFFICER, THERE AFTER , RECOMPUTED THE GROSS RECEIPTS INSOFAR AS THE ASSESSEE HAD DISCLOSED 52,86,232 WHEN THE ASSESSING OFFICER ON THE BASIS OF THE CERTIFICATES FROM THE BANKS WHO GOT THE WORK OF INTERIOR DECORATION DONE FROM THE ASSESSEE COMPUTED THE GROSS RECEIPTS BY PERCENTAGE METHOD OF INCOME TAX DEDUCTION AT SOURCE AT 2% AND VAT COLLECTI ON @4%. HIS COMPUTATION RESULTED IN GROSS RECEIPTS OF 81,04,162 ON WHICH 8% PROFIT WAS HELD TO BE THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER FURTHER TRIED TO FIND OUT AS TO THE BASIS FOR NOT DISCLOSING THESE ACCOUNTS HOLDING SUFFICIENT BALANCE TO ENHANCE THE GROSS RECEIPTS FROM 52 LAKHS TO 81 LAKHS. THE ASSESSING OFFICER, THEREFORE, CORRELATED THE AMOUNTS WHICH THE ASSESSEE CLAIMED AS BALANCING BETWEEN THE ADVANCES FROM SUPPLIERS VIS - - VIS MATERIALS IN HAND ON THE BASIS OF ADVANCES FROM CUSTOME RS. THE LEARNED ASSESSING OFFICER FURTHER PROCEEDED TO INDIVIDUALLY VERIFY THE BANK ACCOUNTS WHEN HE FURTHER ON REJECTING THE BOOK RESULT AND THE CORRECTNESS OF THE BOOK OF ACCOUNT U/S.145(3) PROCEEDED TO DETERMINE THE AMOUNTS UNEXPLAINED REMAINING IN THE HANDS OF THE ASSESSEE AS CASH CREDIT AMOUNTING TO 20,03,458 DURING THE COURSE OF THE PREVIOUS YEAR . HE HELD THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE CREDITWORTHINESS OF THE PERSONS CLAIMED TO HAVE GIVEN CASH ADVANCES AND THE GENUINENESS OF THE TRANS ACTIONS REMAINED A SUSPECT. HE BROUGHT TO TAX @8% ON THE GROSS RECEIPTS AND ALSO THE UNEXPLAINED CASH CREDIT S AMOUNTING TO 20,03,458 ALONG WITH THE INTEREST INCOME ON THE SAVINGS BANK ACCOUNT TOTALLLING THE TAXABLE INCOME IN THE HANDS OF THE ASSESSEE AT 26,38,974. 3. AGGRIEVED, THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY WHO CONFIRMED THE ASSESSING OFFICERS BRINGING TO TAX THE PURPORTED CASH CREDITS ALONG WITH THE ESTIMATION OF INCOME @8% OF THE GROSS RECEIPTS. ITA NO.195/CTK/2012 3 4. THE LEARNED COUNSEL IN ITIATING HIS ARGUMENTS SUBMITTED THAT THE AO AFTER HAVING VERIFIED THE BANK ACCOUNTS, WHICH HE HELD THEM AS UNDISCLOSED PROCEEDED TO CONSIDER THE ENHANCEMENT OF THE GROSS RECEIPTS ON WHICH HE HAS ESTIMATED INCOME AT 8%. THIS CLEARLY INDICATES THAT THE PURP ORTED CREDITS STOOD EXPLAINED BY HIM ITSELF FROM 52 LAKHS TO 81 LAKHS, THE SUM OF 20,03,458 BEING LESS THAN THE DIFFERENCE DEFINITELY STAND S EXPLAINED TO THE EXTENT THAT ARE NOT TO BE EXPLAINED TO THE EXTENT THAT THE BOOKS OF ACCOUNT WERE REJECTED AND THE BANK STATEMENTS WHICH ARE PART AND PARCEL O F THE CREDITS STOOD EXPLAINED BY THE ASSESSING OFFICER HIMSELF. IT WAS NOT THE CASE OF THE ASSESSEE TO EXPLAIN THE NATURE OF ADVANCE FROM CUSTOMERS OR ADVANCE TO SUPPLIERS INSOFAR AS THE AO HAS TAXED @8% ON THE TOTAL GROSS RECEIPTS AMOUNTING TO 81 LAKHS. THE ASSESSING OFFICER, THER EFORE, HAVING REJECTED THE BOOK RESULTS AND HAVING COMPUTED THE INCOME FROM THE CREDITS IN THE BANKS COULD NOT REQUIRE THE ASSESSEE TO EXPLAIN THE NATURE OF CREDITS INSOFAR AS IT WAS THE INTRA BANK TRANSFERS AND NOT THAT THE ASS ESSEE WAS FUNCTIONING FROM BANKS ON BORROWINGS OR HAVING RECEIVED ADVANCES FROM THE BANKS. THE ASSESSEE HAD NOT MAINTAINED THE BOOKS OF ACCOUNT AS REQUIRED UNDER THE LAW THEREFORE STOPPED SHORT FOR THE AO FROM INSISTING ON PASSING THE ORDER U/SD.144 ON HAV ING INVOKED THE PROVISIONS OF SECTION 145(3). THE CASH CREDITS, THEREFORE, WERE NOT TO BE EXPLAINED BY THE ASSESSEE INSOFAR AS THE ASSESSING OFFICER HIMSELF HAS ACCEPTED THE CREDITS BELONGING TO THE ASSESSEE ON WHICH INCOME HE HAS ALREADY BROUGHT TO TAX. T HE LEARNED COUNSEL SUBMITTED THE FACTS AS FOLLOWS : DETAIL ANALYSIS OF BANK A/CS (ASST. YEAR 2008 - 09) NAME NATURE OF ACCOUNTS & A/C NO. OPENING BALANCE IN RS TOTAL RECEIPTS/ DEPOSITS IN INTEREST TOTAL WITHDRAWAL/ PAYMENTS IN CLOSING BALANCE IN REMARKS 1 . SBI, BUXI CURRENT A/C 9295.74 (I)52,62,933/ - NIL 52,59,977/ - 12,251.74 NOT ITA NO.195/CTK/2012 4 BAZAR, EVENING BRANCH, CUTTACK 105464428 08 DISCLOSED 2 . SYNDICATE BANK, NAYAPALLI, BHUBANES WAR CURRENT A/C 800710100 000036 NIL (II)19,37,243.88 NIL 18,99,266.25 37,977 .00 NOT DISCLOSED (PARTLY DISCLOSED TURNOVER) 3 . SBI, MANGLABAG , CUTTACK S/B. A/C 100321817 12 41,886.36 2,31,013.00/ - (III) 77,370.00 (A)1,53,643.00 1,878.00 1,10,000.00 1,64,777.36 PARTLY DISCLOSED 4 . SYNDICATE BANK, NAYAPALLI, BHUBANES WAR S/B A/C 800720 100 01368 5,67,207.5 5 13,30,610.00 20,817.50 8,55,474..00 10,63,161.00 NOT DISCLOSED TOTAL 6,18,389.6 5 87,61,799.88 22,695.50 81,24,715.25 12,78,167.10 1 - (I)+ (II) + (III)= 72,77,546/ - (TALLIED WITH PARA - 3.7 OF ASSESSMENT ORDER) THE ENTRIES IN THE B ANK ACCOUNTS AT SL. NO.3 & 4 AMOUNTING TO (A) 1,53,643/ - AND (B) 13,30,610/ - = 14,84,253/ - ARE TRANSFER OF FUNDS FROM CURRENT ACCOUNTS TO SAVINGS ACCOUNTS AT ABOUT(I+II) 13,50,000 / - CHART BELOW AND THE BALANCE AMOUNT AT 2 - 1,34,253/ - ( 14,84,253/ - MINUS - 13,50,000/ - ). THE DETAILS CHART TO THAT EFFECT IS HEREIN WITH FURNISHED BELOW FOR BETTER APPRECIATION OF FACTS. SBI, BUXIBAZAR SYNDICATE BANK SYNDICATE BANK EVENING BRANCH CURRENT A/C.8007101000036 S.B. A/C.80072010001368 CA A/C.10546442808 ANNEX URE - 6 PAGE - 70(PB) ANNEXURE - 8, PAGE - 73(PB) ANNEXURE - 5, P - 66 25/04/07 1,00,000/ - 25/04/2007 1,00,000/ - 25/02/08 5,00,000/ - P - 66 OF PB 17/10/07 1,00,000/ - 17/10/07 1,00,000/ - 16/09/2007 50,000 / - P - 61 OF PB 12/11/07 1,00,000/ - 12/11/07 1,00,000/ - 15/ 11/07 1,00,000/ - 15/11/07 1,00,000/ - S.B.I.,MANGALABAG, 20/12/07 1,00,000/ - 20/12/07 1,00,000/ - S.B. A/C.NO: - 10032181712 31/12/07 1,00,000/ - 31/12/07 1,00,000/ - UNDER ANNEXURE: - 7 ,PAGE.71(P.B). 24/12/08 1,00,000/ - 24/12/08 1,00,000/ - 16/09 /2007 50,000/ - 15/02/08 1,00,000/ - 15/02/08 1,00,000/ - (II) 50,000/ - 26/02/08 5,00,000 / - P - 73 OF PB (I). 13,00,000/ - THE OPENING BALANCE IN THE SB A/C. OF THE SYNDICATE BANK AT 5,67,207.55 WHICH IS THE CLOSING BALANCE OF THE PREV IOUS ASST. YEAR 2007 - 08 HAVING NO EFFECT FOR THE TRANSACTIONS RELATING TO CURRENT YEAR. PARA - 3.8 OF A.O.S ORDER INCLUDED BANKING TRANSACTIONS AT ABOUT 88,010/ - OUGHT TO BE DELETED AS THE SAME ALREADY INCORPORATED IN THE BANK A/CS., THEREBY THE BALANCE A MOUNT 3 - 52,157/ - OUGHT TO BE INCLUDED WITH GROSS RECEIPTS. PARA - 3.9 A.OS ORDER INCLUDED BANK TRANSACTIONS AT 1,68,963/ - OUGHT TO BE DELETED AS THE SAME ALREADY INCORPORATED IN THE BANK ACCOUNTS, ITA NO.195/CTK/2012 5 THEREBY THE BALANCE AMOUNT 4 - 1,43,300/ - OUGHT TO BE I NCLUDED WITH THE GROSS RECEIPTS. ANALYSIS OF THE GROSS TURNOVER : - AS PER ASST. ORDER AS PER BANK A/CS. PARA - 3.7 72,77,546.00 77,60,232.00 1 - 72,77,546.00 PARA - 3.8 1,40,167.00 2 - 1,34,253.00 PARA - 3.9 2,03,763.00 3 - 52 ,157.00 76,21,476.00 81,04,162.00 4 - 1,43,300.00 ADD 6.06% (TDS + VAT) 4,61,861.00 76,07,156.00 80,83,337.00 ADD 6.06% (TDS + VAT) 4,60,994.00 80,68,150.00 ADD 41,667.00 81,09,817.00 81,09,817.00 81,04,162.00 = 5,655.00 (MARGINAL DIFFERENCE IS AT 5,655/ - ) N.B.: - 6.06% ON 72,77,546/ - IS AT 4,41,019.00 WHICH HAS TAKEN BY THE A.O. AT 4,82,686/ - IN EXCESS AT 41,667/ - IN VIEW OF THE AFORESAID FACTS 52, 86,232/ - AS REVE A LED IN THE AUDITED ACCOUNT AT PAGE: - PAGE - 25 OF PAPER BOOK UNDER ANNEXURE: - 2IS WITHIN THE TURNOVER DETERMINED BY THE LD. A.O. AT 81,04,162/ - FOR WHICH SEPARATE ADDITION IS NOT MAINTAINABLE. HENCE, FOR ALL PRACTICAL PURPOSES IN ORDER T O DEDUCE REAL INCOME OF THE APPELLANT THE TURNOVER OUGHT TO BE CONSIDERED AT 81,04,162/ - BY NEGLECTING 5,655/ - AS A MARGINAL DIFFERENCE. THE OTHER GRIEVANCE OF THE APPELLANT FOR THE ADOPTION OF NET PROFIT @8% IS IN A HIGHER SIDE WHICH OUGHT TO BE REDU CED BY TAKING IN TO CONSIDERATION OF THE PAST RECORDS OF THE APPELLANT. THE DETAIL ANALYSIS OF THE RATE OF GROSS PROFIT AND RATE OF NET PROFIT IS HEREIN WITH STATED BELOW: - RATE OF RATE OF ASST. YEAR GROSS TURNOVER GROSS PROFIT NET PROFIT 2007 - 08 39 ,49,725/ - 10.62% 2.66% 2008 - 09 52,86,232/ - 10.41% 2.75% 2009 - 10 66,06,919/ - 9.12% 3. 01% THE OVERAGE G.P. AND N.P. BASING ON THE PAST RECORD OF THE APPELLANT WAS AT 10.14% AND 2.77% RESPECTIVELY. THE LD. A.O. HAS ADOPTED RATE OF NET PROFIT @ 8% WITHOUT CONSIDERING THE PAST RECORD OF THE APPELLANT WHO IS ALL ALONG IN THE SAME LINE OF TRADE SINCE MORE THAN 10 YEARS. ITA NO.195/CTK/2012 6 5. THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE POINTED OUT THAT IN ABSENCE OF BOOKS OF ACCOUNT THE ASSESSE E IS REQUIRED TO EXPLAIN THE VARIOUS ENTRIES IN THE BANK ACCOUNTS WHICH HE WAS NOT ABLE TO EXPLAIN INSOFAR AS THE CREDITS AND DEBITS IN THE BANK ACCOUNTS WERE NOT DISCLOSED. THE ASSESSING OFFICER WAS NOT TO ENHANCE THE INCOME ON ESTIMATION INSOFAR AS THE G ROSS RECEIPTS HAVE BEEN ACCEPTED BY THE ASSESSEE BEFORE HIM. IT WAS THE ASSESSING OFFICERS FINDING OF FACT THAT HAVING BALANCES IN THE BANKS THE ASSESSEE COULD NOT HAVE HAD CREDITS WHICH WERE BROUGHT TO TAX UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. T HE LEARNED CIT(A) HAS CATEGORICALLY IN HIS ORDER NOTED IN PARA 6.3 THAT THE ASSESSEE WAS NOT ABLE TO EXPLAIN THE SOURCES OF THE CREDITS WHICH HAVE BEEN SPECIFICALLY BROUGHT TO TAX AND CONFIRMED BY HIM. HE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW FOR H IS PART SUBMISSIONS. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON THE ISSUE OF ADDITION U/S.68, WE ARE INCLINED TO FIND THE CONTENTION OF THE LEARNED COUNSEL REASONABLE TO THE EXTENT THAT THE ASSESSEE GOT ITS ACC OUNTS AUDITED AND FURNISHED FINANCIAL STATEMENTS DULY AUDITED WHICH DID NOT INCLUDES THESE CREDITS. THE BANK ACCOUNTS RELIED ON BY THE ASSESSING OFFICER WERE THEREFORE FOR THE PURPOSE OF DETERMINING THE GROSS RECEIPTS WHICH HE ENHANCED FROM 51 LAKHS TO 81 LAKHS COVERED THE EXPANSION WHICH HE PROPOSED ON THE BASIS OF TAX DEDUCTED AT SOURCE AND VAT PAID BY THE ASSESSEE. THE ASSESSEE IS A SMALL TIME DECORATOR AND DID NOT MAINTAIN BOOKS OF ACCOUNT ARE UNDISPUTED FACTS. THE ASSESSING OFFICER, THEREAFTER PROC EEDED TO DETERMINE THE INTERVENING YEARS FUNCTIONING BY THE ASSESSEE ON THE BASIS OF CREDITS OBTAINED AND PAYMENTS MADE TO SUPPLIERS OF MATERIALS ON BEHALF OF THE BANKS WHO HAVE PAID HIM TO REACH A TURNOVER OF ITA NO.195/CTK/2012 7 81,04,162. IN OTHER WORDS, IT WAS AN EXERCI SE BY THE ASSESSING OFFICER TO DETERMINE CREDITS UTILISED BY THE ASSESSEE IN ABSENCE OF BOOKS OF ACCOUNT TO BE EXPLAINED BY THE ASSESSEE WHEN THE ASSESSING OFFICER HIMSELF IS ENHANCING THE CREDITS ON THE BASIS OF TDS AND VAT CERTIFICATES WHICH WERE DISCLOS ED WERE BASICALLY FOR TALLYING WITH BOOKS OF ACCOUNT BY THE ASSESSEE AS WELL AS THE ASSESSING OFFICER. CASH CREDITS U/S.68 OF THE ACT CAN ONLY BE TAXED WHEN THE ASSESSEE IS UNABLE TO EXPLAIN THE NATURE OF SUCH CREDITS INSCRIBED THEREIN WHEN THE ASSESSING OFFICER HIMSELF HAS DETERMINED THE CREDITS ON HIS OWN FROM THE BANK ACCOUNTS AS SUBMITTED BY THE LEARNED COUNSEL HEREIN ABOVE. THE INTRA BANK TRANSFERS THEREFORE DID N OT REQUIRE EXPLANATION INSOFAR AS THE CREDITS WERE ALREADY AVAILABLE TO THE ASSESSEE AT T HE END OF THE YEAR. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE BALANCED THE ADVANCES TO THE SUPPLIERS FROM ADVANCES TO CUSTOMERS WAS NOT THE CASE OF THE ASSESSEE INSOFAR AS THE BANK ACCOUNTS OR HI S BOOKS OF ACCOUNT FOR DEFENDING HIS CASE NOT AS AN AC COUNTANT BUT TO SUPPORT DETERMINATION OF INCOME AND NOT THE PURPORTED CASH CREDITS. ONCE THE ASSESSING OFFICER ACCEPTED 8% INCOME ON 81,04,162 IT WAS A FUTILE EXERCISE BY THE ASSESSING OFFICER TO BRING TO TAX A SUM OF 20,03,.458. IT CANNOT BY ANY STRET CH OF IMAGINATION BE CONSIDERED AS UNEXPLAINED BY THE ASSESSEE. THE ONUS STOOD DISCHARGED BY THE ASSESSING OFFICER HIMSELF WHEN HE ENHANCED THE GROSS RECEIPTS FROM 51 LAKHS TO 81 LAKHS AND THAT IS THE REASON HE WAS NOT ABLE TO COMPUTE THE CORRECT INCOM E OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 145(3). THEREFORE, ON THE BASIS OF THIS, THE LEARNED CIT(A) MERELY REEXAMINED THE ISSUE IN THE LINE THAT OF THE ASSESSING OFFICER HA D DONE BUT WAS AN EXERCISE TO GIVE ACCOUNTING TREATMENT BY PASSING NECESSARY ENTRIES WHICH OUGHT NOT TO HAVE BEEN CONDUCTED BY THE ASSESSEE TO EXPLAIN AS ALREADY PUT FORTH AS ABOVE . THE ASSESSEE INSISTED THAT HE DOES NOT HAVE THE BOOKS OF ACCOUNT AND THAT IS WHY ITA NO.195/CTK/2012 8 THE BANK ACCOUNTS WHERE THE ASSESSEE WAS RENDERING INTERIOR DECORATIONS WORK WAS NOT DISCLOSED FOR THE GROSS RECEIPTS . IT WAS ON THE BASIS OF GROSS RECEIPTS WHICH WAS COMPUTED BY THE ASSESSING OFFICER THAT HE AGREED TO BE TAXED ON ESTIMATION AT 5% BUT WAS TAXED @8%. WE HAVE CONSIDERED THE CONTENTION OF THE LEARNED COUNSEL WHICH DIRECTLY RELATES TO FACT THAT SUCH DIFFERENCE WHICH HAD BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT WOULD LEAD TO A DIFFERENCE OF 5,655 ONLY AND AS PER TH E GROSS MARGIN RENDERED BY THE ASSESSEE IN THE PRECEDING AND SUCCEEDING AYS, THE ASSES SEE OUGHT NOT TO BE TAXED ON ESTIMATION @8% WHICH THE LEARNED COUNSEL HAS PROPOSED TO BE TAXED @5% IN VIEW OF THE ASSESSEE TO BUY PEACE HAS INSTRUCTED HIM TO BE TAXED AT. THE ADDITION OF 20,03,458 IS THEREFORE DELETED AND THE ASSESSING OFFICER IS DIRECTE D TO TAX THE INCOME OF THE ASSESSEE FROM INTERIOR DECORATION WORK @5% OF 81,04,162, WHICH WE CONSIDER AS REASONABLE IN VIEW OF THE ASSESSEE NOT MAINTAINING BOOKS OF ACCOUNT WHICH RESULTED IN HIS INABILITY TO EXPLAIN THE CREDITS IN THE BANKS VIS - - VIS GRO SS INCOME ACCEPTED BY THE AO. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. S D/ - S D / - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 04.04.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SHRI NARAYAN HATI, AT: MERIA BAAR,BUXI BAZAR,DIST. CUTTACK. 2. THE RESPONDENT: ITO, WARD 2(3), CUTTACK. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.