MUTHUGOUNDER MARIMUTHU,SALEM vs. ITO, WARD-2(2), SALEM

We find that this appeal is filed with a delay of 353 days. The assessee filed an affidavit for condonation of delay stating the reasons,

At the outset, we find the orders passed by the AO and the ld. CIT(A) ex parte of the assessee. On perusal of the assessment order dated 28.09.2021, AO made addition of ₹94,50,210 on account of unexplained money under Section 69(A) of the Act. Admittedly, there was no representation on behalf of the assessee before the AO in the assessment proceedings. Being aggrieved by the said order, the assessee challenged the same before the ld. CIT(A), wherein it is noted that no representation was made before the ld. CIT(A), thereby the ld. CIT(A) proceeded to confirm the order of the AO for non-compliance, which is evident from para 4.1 to 4.6 of the impugned order. Before us, the ld. AR Mr. T.S. Lakshmi Venkataraman prayed to adopt reasonable estimation taking into account the oldest AY being 2012-13. Further, the ld. AR suggested to adopt net profit at the rate of 8% of the total addition made by the AO, which is confirmed by the ld. CIT(A).

The ld. DR Ms. Gouthami Manivasagam agreed for the same taking into account the oldest AY.

We note, as contended by the ld. AR, that the assessee is engaged in the business of lorry transport and squarely falls within the ambit of Section 44AE of the Act. Further, it has been submitted that the assessee owned four lorries earlier and presently owns three lorries; therefore, the prayer to estimate the net profit at 8% of the total receipts is fair and reasonable. We find that the AO has added the entire cash credits as income of the assessee without extending the benefit of corresponding expenditure, which, in our considered view, is not justified. Thus, the net profit of ₹7,56,017/- (being 8% of ₹94,50,210/-) is confirmed to tax, and the grounds raised by the assessee are allowed.

In the result, appeal filed by the assessee is allowed.