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2014 (10) TMI 487 - AT - Income TaxReduction of net profits from 12% to 5.5% - Failure to produce books of accounts, bills and vouchers - Held that:- The assessee did not produce the bills and vouchers for verification before the AO - there was no other option except to estimate the income, however the estimate by applying the net profit rate of 12% by the AO was without any basis and even the past history of the case was not considered - CIT(A) considered the past history of the assessee and applied the net profit rate of 5.5% - the net profit rate applied by the CIT(A) by considering the net profit rate declared by the assessee and accepted by the various authorities for the last five assessment years i.e. A.Y. 2004-05 to 2008-09 was fair and reasonable – the order of the CIT(A) is upheld – Decided against revenue. Salary and interest paid to partners disallowed – Held that:- There was no change in the partnership deed - The provisions contained in section 184 of the Act requires that a certified copy of the partnership deed is to be furnished along with return if there is change in the partnership deed or it was the first return of income of the partnership firm - it was not the first year of the partnership firm and there was no change in the partnership - The AO also had not established how and in what manner, the assessee failed to comply with the provisions of section 184 of the Act – thus, the AO was not justified in making the disallowance and the CIT(A) rightly deleted the same – the order of the CIT(A) is upheld – Decided against revenue.
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