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2014 (3) TMI 1149 - ITAT AMRITSARRejection of books of accounts - estimation of income - AO & CIT(A) applied the net profit rate of 12% without allowing the interest and salary to partners, depreciation and bank interest - HELD THAT:-There is no dispute to the fact that the assessee has produced 24 labourers in the remand proceedings, who have confirmed to have received wages, as declared by the assessee. But at the same time, the assessee could not get the verification of rest of the wages out of total wages of ₹ 2,15,33,520/-, which is a huge amount and there is possibility of leakage of revenue, where accurate income cannot be deducted by the A.O. Therefore, we find no infirmity in the order of the ld. CIT(A) who has rightly confirmed the invoking of section 145(3) of the Act. Estimation of income - there is no dispute to the fact that the assessee in the preceding years has been assessed almost at the returned income except minor additions. The assessee during the impugned year before depreciation, interest & salary to partners and bank interest has declared better results as is evident from the comparative figures mentioned hereinabove. Therefore we modify the order of both the authorities below and direct the AO to estimate Net Profit rate of 5% on contract receipts declared by the assessee and thereafter allow salary and interest to partners and depreciation subject to the income does not fall below the returned income. Appeal of the Revenue and that of the assessee are partly allowed.
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