RAJENDRA SHAMSUNDER BIHANI,,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 3,, PUNE

This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)-5, Pune (‘CIT(A)’ for short) dated 29.06.2017 for the assessment year 2011-12.

Briefly, the facts of the case are that the appellant is an individual engaged in the business of transport and share of profit from the partnership firm. The return of income for the assessment year 2011-12 was filed on 30.03.2013 declaring total income of Rs.79,34,451/-. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Circle-3, Pune (‘the Assessing Officer’ for short) vide order dated 11.03.2014 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’ for short) at a total income of Rs.91,48,678/-. While doing so, the Assessing Officer Rs.2,24,694/- being 1/3rd of tanker expenses of Rs.6,74,081/- as the appellant had failed to substantiate the expenditure. Further, the Assessing Officer made addition of Rs.9,89,533/- being the addition to the capital disbelieving the explanation of the assessee that the same represents the capital of business M/s Ganesh Agency, Proprietor Late Shri Shyamsunder Bihani, who is father of the assessee on his demise. The Assessing Officer observed that in the books of account maintained by the Shri Late Shyamsunder Bihani it is mentioned that the business was gifted to one Shri Ramkishan Bihani and the appellant had failed to furnish the bank account statement of Shri Shyamsunder Bihani and the Will of Shri Ramkishan Bihani through the takeover the business. 3. On appeal before the ld. CIT(A), the ld. CIT(A) after considering the evidence filed by the assessee in support of the tanker expenses confirmed the disallowance only to the extent of 10% of the expenditure as against 1/3rd of the disallowance made by the Assessing Officer. The ld. CIT(A) also confirmed the addition on account of capital introduction noticing the certain discrepancies in the explanation filed by the appellant. 4. Being aggrieved by the above decision of the ld. CIT(A), the assessee is before us in the present appeal. 5. When the appeal was called for hearing none appeared on behalf of the appellant-assessee despite due service of notice. After hearing the ld. Sr. CIT- DR and perused the material on record, we proceed to dispose of this matter. Ground no.1 challenges the disallowance of 10% tanker expenses. From the material on record, we find that the appellant shown profit of Rs.4,82,231/- as against the gross receipts from the business of tanker of Rs.11,56,312/- resulting into profit of approximately 42%, which, in our considered opinion is more reasonable, also having regard to the nature of the expenditure