SACHIN GANPAT VADANE,SOLAPUR vs. ITO, WARD-1(1), SOLAPUR, SOLAPUR

Assessee has raised following grounds of appeal :

At the outset, ld. Counsel for the assessee requested for not pressing the legal issues raised in the Ground of appeal No.1 and therefore the same is dismissed as ‘not pressed’.

So far as merits of the case are concerned, Ld. Counsel for the assessee submitted that the assessee is a small retail trader of cattle feed and during the year has made purchases of Rs.12,06,959/- from Hindustan Eco Tech Private limited and have sold them with a minimal margin of profit. He submitted that only the profit element may be subjected to addition and not the total amount of purchases as has been made by the ld. Assessing Officer making addition for unexplained expenditure u/s.69C of the Act at Rs.12,06,959/.

On the other hand, ld. Departmental Representative supported the order of ld.CIT(A) and also stated that no details have been filed by the assessee for carrying out the business activity.

We have heard the rival contentions and perused the record placed before us. We notice that the assessee is an individual and based at village named Ule, South Solapur, District Solapur and has claimed to be an Agriculturist and small trader and has purchased cattle feed during the year. Ld. Assessing Officer based on the information about cash purchases of Rs.12,06,959/- from Hindustan Eco Tech Private limited, issued notice u/s.148 of the Act and due to non- compliance on the part of the assessee best Judgment assessment has been framed and total purchases have been added u/s.69C of the Act and income assessed at Rs.12,06,959/-.

We further observe that during the course of appellate proceedings before ld.CIT(A) assessee has made the submissions that he has purchased the goods used for agricultural activity and sold it in small quantities to other persons in the village and that the case of the assessee falls under exception provided under Rule 6DD of the Income Tax Rules, 1962 and that the provisions of section 40A(3) of the Act are not applicable. We further observe that though the assessee did not appear before the Assessing Officer but detailed submissions were filed before CIT(A). We also take note of the Affidavit filed by the assessee on 06.02.2023 where he has stated that he runs a small retail business of purchase and sale of cattle feed since October, 2017 which was ultimately closed in March 2020. It is also stated in the Affidavit that the village having population nor more than 6000 and his daily sales of cattle feed were around Rs.4,000/- to Rs.6000/- and his customers are mainly those who owns Cows and Buffalows and his annual income from business is

On going through the averments made in the affidavit as well as the contentions made by ld. Counsel for the assessee and there being no other contrary material found against the assessee, we are satisfied that the assessee is indulged into retail business of purchase of sale of cattle feed and only the net profit on the sales turnover of the assessee during the years needs to be added as income. Though specific details of turnover are not available, however, considering the purchases made from Hindustan Eco Tech Private Limited as well as the daily sales stated by the assessee in the affidavit, the turnover of the assessee is estimated at approximately Rs.20.00 lakh per annum and by application of section 44AD of the Act (under presumptive taxation) we adopt net profit @8% on the said turnover and estimate the income of the assessee for the year at Rs.1.60 lakh. We sustain the addition of Rs.1.60 lakh and partly allow the grounds of appeal raised by the assessee on merit.

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