SRI AJIT PRASAD DEY,BANKURA vs. ITO, WARD - 3(1), BANKURA, BANKURA

ORDER Per M.Balaganesh, AM

Ajit Prasad Dey A.Yr. 2012-13 3. The brief facts of this issue is that the assessee is an individual carrying on business of wholesale trade of eggs and fish. The assessee filed its return of income for assessment year 2012-13 on 18.07.2013 declaring total income of Rs. 6,86,060/-. The return of income was filed together with the tax audit report dated 18.09.2012. The ld. AO observed that the assessee did not respond to the various notices issued to him in the assessment proceedings. The books of accounts , the documents and other particulars requisitioned u/s 142(1) of the Act were not furnished by the assessee. Accordingly, he proceeded to reject the book results of the assessee and proceeded to determine the net profit at 8% and made addition accordingly. Before the Ld. CIT(A), the assessee prayed for one more opportunity before the ld. AO and agreed to furnish the books of accounts before the ld. AO. Accordingly, the Ld. CIT(A) sought for remand report from the ld. AO. In the remand proceedings, the assessee produced the computerised books of accounts without any supporting evidences thereon before the ld. AO. Based on this, the Ld. CIT(A) upheld the action of the ld. AO in adoption of net profit at 8% on an estimated basis. Aggrieved, the assessee is in appeal before us.

He prayed for estimating the net profit rate at 2 to 2.5% for the year under consideration. In response to this, the ld. DR vehemently relied on the orders of the lower authorities below. We find that it is now well settled that the revenue before

Ajit Prasad Dey A.Yr. 2012-13 resorting to estimation of net profit should first consider the past history of the assessee. We find that the past history of the assessee as tabulated above shows that the assessee’s highest net profit in immediately preceding three financial years was 1.84%. We find that the average of the net profit works out to 1.54%. The assessee during the year had disclosed the net profit of 0.76%. The Hon’ble Madhya Pradesh High Court had also held in the case of Brajlal Manilal & Co. vs. CIT reported in 92 ITR 287 and in yet another decision of Madhya Pradesh High Court Indore Bench in the case of Moorji Udhavji vs. CIT reported in 145 ITR 575 had held that earlier year profit percentage should be the basis or adoption of profit percentage in the year under appeal. In view of past history of the assessee as tabulated supra and in view of aforesaid decisions of Hon’ble Madhya Pradesh High Court and in view of the concession given by the ld AR, we hold that adoption of net profit percentage at 2.50% for the assessment year 2012-13 would meet the ends of justice as income from business. Accordingly, grounds raised by the assessee are partly allowed.

Order pronounced in the Court on 05. 09.2018