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2012 (7) TMI 908 - AT - Income TaxAddition u/s 145 - Held that:- According to section 145(1), income chargeable under the head ‘profit and gains of business’ shall be computed in accordance with the method of accountancy adopted by an assessee subject to the conditions enumerated in sub-sections (2) (3) of section 145. It means that the AO has to determine the income in accordance with the method of accounting adopted by an assessee, provided that method enabled the Assessing Officer to deduce the true income of an assessee. If it emerges out from the record that on the basis of the account maintained by an assessee, it is not possible to deduce true income then he can resort the estimation of the profit. In the present case, the assessee was not maintaining stock register quality-wise. In the absence of such details, it is quite difficult what type of paddy the assessee has purchased which was converted into rice. The assessee can easily manipulate the purchases as well as the sales in the absence of the quality-wise details. AO has rightly rejected the book results and made an ad hoc addition.
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