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2010 (9) TMI 723 - AT - Income TaxRevision orders - Under section 263 - Held that:- Assessing Officer has made enquiry in respect to cash payment made hit by provisions of section 40A(3) and assessee had filed reply that the provisions are not applicable on the facts of the present case - It is further seen that after knowing various defects in the maintenance of books of account, the books of account were rejected by invoking provisions of section 145(3) by the Assessing Officer and profit rate of 12 per cent was applied subject to deduction on account of depreciation and interest. Once GP rate or net profit rate is applied, then no further disallowance can be made u/s 40A(3) or any other provision as held by Hon'ble Allahabad High Court in the case of Banwarilal Banshidhar [1997 -TMI - 17366 - ALLAHABAD High Court]- Therefore, in our considered view, there was no reason to set aside the order of Assessing Officer at the end of learned CIT by holding the same erroneous and prejudicial to the interest of revenue - initiation of proceedings u/s 263 was not justified - Accordingly set aside the order of learned CIT and restore the order of Assessing Officer passed originally.
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