SUNRISE STOCK SERVICES (P) LTD. Vs. CIT

JUDGEMENT

(1.) THIS appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 31.12.2009 passed by the Income Tax Appellate Tribunal, Chandigarh Bench B, Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 367/Chandi/2008 for the assessment year 2005 -06, proposing to raise the following substantial questions of law: -

(2.) THE Tribunal restored the said addition. The Tribunal noticed the fact that originally the assessee declared income of Rs. 9,04,360/ -. Later the assessee made additional disclosure of income of Rs. 14,25,000/ -. The assessee took the stand that its books of account were lost and FIR was lodged on 6.6.2006. Having regard to the turnover of Rs. 33,31,48,866/ -, the Assessing Officer was of the view that the disclosed income was not genuine and in absence of books of account, the Assessing Officer made assessment by applying rate of 2% to the gross turnover reflected in the return of income. The view taken by the CIT (A) that there was not sufficient evidence to rebut the claim of the assessee, the addition was not justified was not approved by the Tribunal. It was observed as under: -

(3.) WE are unable to accept the submission. The Tribunal had duly considered the statement of the Director. The assessee was adopting modus operandi of receiving cash through cheques from various parties and giving them share profits. Claim of the assessee that it was receiving only 1.50% commission on long term transactions and 0.30% commission on total transactions was duly considered and it was held that the rate of commission disclosed by the assessee was not acceptable. Further, circumstance that the assessee itself surrendered additional income was also taken into account which fact itself shows that the initial declaration of income of the assessee was not genuine. In absence of genuineness of the stand of the assessee, the Tribunal held that rate of 0.75% to the gross turnover would be a fair assessment. The assessment of income of the assessee in the facts and circumstances of the case cannot be held to be illegal or arbitrary.