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2014 (11) TMI 402 - AT - Income TaxUnexplained investment from undisclosed/out of books income/receipts - Reference made to DVO – Held that:- The revenue should adopt some mode to educate their AO to act in accordance with law and whenever any judgment of the Hon’ble Apex Court is rendered on a particular issue, they should follow the same - Since reference has been made without even calling for the books of account, what to say about the rejection of the books of account, the reference to the DVO is bad and invalid in the eyes of law and any valuation made on the basis of invalid reference cannot be used as a piece of evidence for estimating the cost of construction in the immovable property - the addition made by the AO u/s 69 of the Act for unexplained investment in the property deserves to be deleted and the order of the CIT(A) is to be set aside. Estimation of NP @ 10% - Receipts of hospital – Held that:- Revenue could not point out any specific defect in the order of the CIT(A) - the assessee has contended that the AO has applied the net profit rate at 10% on the receipts of hospital without pointing out any defect in the maintenance of the books of account - No doubt, net profit rate can be re-estimated by the AO but it can only be done where the defects are pointed out in the maintenance of the books of account - Without pointing out any defect, re-estimation of net profit rate is not permissible – Decided against revenue. Receipts of school of nursing and paramedical – Held that:- CIT(A) has called for assessment record and verified himself the difference in fees of School of Nursing & Institute of Paramedical Science and noted that the AO has worked out the difference in fees of School of Nursing & Institute of Paramedical Science at ₹ 22,86,300/- as against ₹ 22,08,000/- shown by the assessee on the basis of documents impounded during the course of survey under section 133A of the Act on 7.3.2009 – the order of the CIT(A) is upheld – Decided against assessee.
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