KAUSHIK GHOSH,KOLKATA vs. ACIT, CIRCLE-44, KOLKATA, KOLKATA

Assessment Year: 2012-13 Kaushik Ghosh..........................…..…….……………………..……………………………………………….…..Appellant 15, Raja Sew Box Bagla Lane Kolkata – 700 004 [PAN : ADLPG 5836 A] Assistant Commissioner of Income Tax, Circle-44, Kolkata..........................……………..Respondent Appearances by: Shri Subash Agarwal, AR, appeared on behalf of the assessee. Shri S. Dasgupta, Addl. CIT, D/R. appearing on behalf of the Revenue. Date of concluding the hearing : July 17th, 2018 Date of pronouncing the order : August 3rd, 2018 ORDER Per J. Sudhakar Reddy, AM :-

This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-13, Kolkata (hereinafter the ‘Ld. CIT(A)’), dt. 31/08/2016, passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’), relating to Assessment Year 2012-13. 2. Though the assessee has raised four grounds of appeal

, the ld. Counsel for the assessee submitted that, to give quietus to the issue, he is only arguing Ground No.3, which reads as follows:- “3. (a) For that on the facts and in the circumstances of the case, the ld. CIT(A) was not justified in making an enhancement of income of the assessee by estimating the net profit @8% as against the A.O.’s estimation of 5.63% of receipts. (b) For that, without prejudice to ground no. 1, the Ld. CIT(A) ought to have made a reasonable estimate of the assessee’s income.”

3. The assessee is an individual and is running an advertising concern. The Assessing Officer passed order u/s 144 of the Act, estimating the income of the assessee at 5.63% of the gross receipts of Rs.1,01,77,065/-. This percentage of 5.63% was arrived at by the Assessing Officer by taking the average of the net

Assessment Year: 2012-13 Kaushik Ghosh profits declared by the assessee for the Assessment Years 2010-11, 2011-12 & 2012-13.

3.1. On appeal, while giving relief on other issues, the ld. CIT(A) directed that the income be estimated as @ 8% of the total turnover, for the reason that the assessee had shown 7.31% of the turnover as the percentage of profit for the earlier Assessment Year. 4. Further aggrieved, the assessee is in appeal before us.

5.1. This is a case of estimation. The Assessing Officer has himself estimated the profit at 5.63%. The ld. CIT(A) on the ground that the assessee had earned a percentage of profit at the rate of 7.31% of the turnover, directed the Assessing Officer to adopt 8% of the turnover as profit for this year. The assessee, submitted before the Assessing Officer that, there is a reduction in the gross turnover of the assessee from about Rs.16 Crores in the earlier Assessment Years to Rs.10 Crores in the impugned Assessment Years and that due to downturn in the business, the percentage of profit estimated by the ld. CIT(A) is excessive and unreasonable.

5.2. The ld. D/R, submits that, the net profit earned for the Assessment Year 2012- 13 i.e. 3.22% should not have been considered by the Assessing Officer, as the books of accounts itself were rejected. He pleaded that this estimate by the ld. CIT(A) in fair and reasonable and hence requires no interference.