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2013 (3) TMI 648 - AT - Income TaxN.P. determination - Held that:- Would be reasonable and proper to apply the net profit rate of 3% against admitted receipts for the purpose of computing the business income of the assessee as against 6% profit rate applied by the ld. CIT(A) without giving further deduction to the assessee. We, therefore, modify the orders of the authorities below and direct the AO to apply net profit rate of 3% against admitted receipt of the assessee and profit would be estimated at ₹ 40,61,505/- and after deducting income declared by the assessee at ₹ 19,20,210/-, the addition would be maintained in a sum of ₹ 21,41,295/-. While taking this figure, deduction claimed by the assessee of depreciation, salary paid to the partners and interest on capital shall be taken care of to which proposition the assessee has also agreed. We may note here that lesser net profit rate is applied in this case for computing business income considering the earlier history of assessee and objections of the AO for inflating expenses and that the assessee earned income mainly from Government and semi-government where profit margin is always lesser. In view of the above, final addition is maintained in a sum of ₹ 21,41,295/- as against addition confirmed by the ld. CIT(A) in a sum of ₹ 62,02,802/-. As a result, the appeal of the assessee deserves to be partly allowed.
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