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2018 (1) TMI 394 - ITAT JAIPURRejection of books of accounts - invocation of section 145 - estimation of G.P. - Held that:- G.P. rate for the year under consideration was better than immediate preceding year. Further this was a new business started wherein the expenditure on account of rent and the stitching was comparably higher to the other established sister concern units. This fact has been compared with the rent and stitching expenses debited in the P&L account of the assessee and in the P&L account of sister concern in the name of Nakora Packaging Industries. Thus, the assessee is able to establish that the books results are comparable to the sister concern for the peculiar facts of this case for the year under consideration. Considering all these facts and legal position, the Bench find no merit in sustaining this disallowance, hence, the same is hereby deleted. Lump sum disallowance on account of various expenses debited in the P&L account - Held that:- The appellant could not fully controvert the findings of the AO. However, the disallowance made by the AO appears to be on the higher side. Considering the volume and nature of business of the appellant, it would be fair and reasonable to restrict the disallowance to 50% of the amount disallowed by the AO. CIT(A) has reasonably restricted the disallowance at ₹ 28,866/-, therefore, the same is hereby upheld.
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