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2016 (11) TMI 1526 - AT - Income TaxRejection of books of accounts u/s 145 - G.P. determination - Held that:- In the instant case, in absence of production of ledgers and bills, there is no finding that the purchase and sales are fully vouched and similarly, there is no finding that the closing stock has been examined by the AO after taking into consideration the opening stock, purchases and sales. In light of that, we confirm the rejection of books of accounts u/s 145(3) of the Act. Estimation of profits after rejection of the books in the instant year, the assessee has reported a turnover of ₹ 7.5 Cr which is almost 38% of peak turnover achieved in the past years and we were to work out the comparative G.P, keeping all other things constant, it will result in G.P of 3.64%. In absence of any other creditable data on record in terms of fall in G.P rate submitted by the assessee and based on the past assessment history of the assessee, we accordingly confirm the G.P rate of 3.64% to be applied on the turnover of ₹ 7.51 Cr. The ground of appeal is thus partly allowed. Addition u/s 41(1) holding that the creditors shown in the books of account have cease to exist - Held that:- In the instant case, it is therefore imperative on the part of the AO to carry out necessary enquiries with the trade creditors independently in order to determine whether there is remission of liability or not. We, accordingly, set-aside the matter to the file of the AO to carry out the necessary examination/enquiry from the trade creditors and examine the matter a fresh as per law and after providing reasonable opportunity to the assessee. Needless to say, the assessee shall cooperate and provide all relevant information and latest contact details of the creditors so that the matter may be decided expeditiously. The ground is therefore allowed for statistical purposes. TDS u/s 194J - non deduction of tds on professional fee - Held that:- The recipient of income M/s Kalani & Co has included the income of ₹ 50,000/- in its return of income and a copy of CA certificate was filed before the AO, we delete the disallowance in question. - Decided in favour of assessee.
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