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2016 (9) TMI 1327 - AT - Income TaxRejection of books of account - applying net profit rate @ 8% - Held that:- Apart from facts the bills and vouchers cannot be admitted as there were neither filed during the course of assessment proceedings nor during the course of remand proceedings and there is no justification offered for the same. No respectability is attached to these vouchers filed at this stage particularly when payments are paid in cash in respect of these bills. Looking into these facts it is to be held that books of accounts are not reliable and therefore rejection of the same is upheld. Similarly, estimating the net profit @ 8% is also as proper on the facts and the case.The first ground is therefore rejected. Addition u/s 68 towards unexplained cash credit - Held that:- All the impugned transactions of cash credits are duly explained and identity, genuineness and creditworthiness of each of them are proved in the form of bank account, confirmations, reply of cash creditors u/s 133(6) of the Act in some cases, confirmation leters. We are, therefore, of the view that addition u/s 68 needs to be deleted. Disallowance u/s 41(1) - Held that:- No addition is called for u/s 41(1) of the Act with regard to the sundry creditors. See CIT vs. Bhogilal Ramjibhai Atara [2014 (2) TMI 794 - GUJARAT HIGH COURT] Disallowance of depreciation - Held that:- As regards addition on account of plant and machinery, assessee produced bills of ₹ 2,90,183/- for verification. For the remaining amount of addition towards factory building and plant and machinery assessee neither produced any evidence before the assessing authority nor ld. AR has been able to improve his case further than over the facts brought in before the assessing authority in remand report. We are, therefore, of the view that out of the disallowance of depreciation of ₹ 90,730/- assessee should be allowed depreciation on ₹ 729/- towards factory building and depreciation on plant and machinery at ₹ 2,90,183/- as per applicable rates and on the basis of date of purchases of assets. We direct the Assessing Officer to calculate the depreciation accordingly.
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