Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2008 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (8) TMI 921 - AT - Income TaxChallenged the order passed by CIT u/s 263 - assessment framed by the AO is erroneous in as much as prejudicial to the interest of revenue - no inquiry had been made by the AO before the assessment mid there was cash payment exceeding ₹ 20,000 which is required to be considered for disallowance u/s 40A(3) - HELD THAT:- In the instant case, we found that assessment was framed by the AO after due inquiry and verification of the books of accounts and other details. Justifiable addition has also been made by the AO, merely because the books of accounts which were destroyed could not be produced before the CIT, as unreasonable view for estimating the profit at the rate of 8 per cent cannot be substituted for the decision of the AO which has been arrived at after verification of books of accounts, details of expenses, reason for low GP rate etc. Therefore, we found that action of CIT is net sustainable on facts and in law. On merits also, no expenditure in excess of ₹ 20,000 have been made in cash, as found by AO on subsequent inquiry which framing assessment u/s 263/143(3). There is also no justification for computing the profit at the rate of 8 per cent when the reasonable addition has already been made by the AO after taking into account various facts and circumstances of the case Including nature of assessee’s business, reason for decline in GP rate, possibility of over statement of expenses or that of unverifiable nature of expenses etc. Hence, the order passed by CIT u/s 263 is set aside and the appeal of the assessee is allowed. In the result, the appeal of the assessee stands allowed.
|