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2010 (2) TMI 719 - ITAT, AHMEDABADRejection of accounts and addition in gross profit on the basis of low gross profit ratio. - disallowance of depreciation at higher rate of 50 per cent - disallowanc the brokerage expenditure on the basis of its genuineness and legitimate. - Rejection the claim of deduction u/s 80-IB(4). Penalty u/s 271(1)(c) Rejection of Accounts - Held that:- The AO had not pointed out any adverse reporting by the statutory auditors in the audited financial statements. This means that these financial statements are based on the entries passed in the books of account which were duly audited by the auditors and, therefore, the audited financial statements have to be accepted as the final result of the books of account claimed to have been lost in the flood. The decline in gross profit rate is accepted in last year scrutiny assessment also. decided in favor of Assessee. Disallowance of depreciation. - Held that:- Denial of benefit of higher rate of depreciation in respect of pre-weaving machines on the basis of same issue has been decided from last year by Tribunal( not covered the said block 111(6) and he, therefore, allowed depreciation at normal rates only). Decided against Assessee Disallowance of Brokerage. - Held that:- Assessee is in yarn business where maximum business is done through brokers.Therefore AO are not justified in disallowing the brokerage expenses. decided in favour of Assessee. Disallowance u/s 80-IB(4). - Held that:- denial of deduction on technical ground is not justified. We direct the AO to grant the opportunity to the assessee-company to file the audit report in Form No. 10CCB. Remand back to AO. Peanlty u/s 271(1)(c) - held that:- If the Tribunal has confirmed the addition that does not mean that the assessee has concealed the income or has furnished inaccurate particulars of such income. When a disallowance is made merely on an estimate basis, the penalty cannot automatically be imposed. decided in favour of Assessee.
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