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2012 (11) TMI 280 - AT - Income TaxDisallowance of Purchases – Held that:- Assessee has not maintained proper books of accounts for his business and his business expenditure are not supported by proper bills and vouchers. AO has considered the purchases as supported by documents and considered the entire sales for determining the income of the assessee. - Assessee submits that his books of accounts can be rejected and income may estimated at 6 to 8% on sales. It is well established fact that every business has associated with expenditure. The percentage of net profit may very from business to business. The real estate sector may have net profit percentage between 5% to 20%. Considering the assessee nature and size of business net profit of 15% would be appropriate and accordingly AO is directed to adopt 15% net profit on sales and compute the profit from business - this ground is allowed in favour of assessee. Disallowance of Expenses – Held that:- Every business has its own ratio of expenses associated with sales. As the assessee has not substantiated business expenditure even at the time of appellate proceedings, thereby restricted the disallowances of expenses to 30%. Sale of agricultural land - Agricultural incomes chargeable as Income from other sources – Held that:- Assessee has not furnished details such as proof of agricultural operations carried out, details of purchases and expenditure incurred for agricultural operations, details of sale bills etc. just because he hold agricultural land it cannot be assumed that he is earning agricultural income as declared by the assessee - considering the facts of the case, Assessing Officer is directed to disallow only Rs. 5 lakhs out of the agricultural income claimed by the assessee instead of Rs. 10 lakhs disallowed by the Assessing Officer - assessee’s appeal is partly allowed. Disallowance of Expenses – Held that:- Rs. 7,34,654/- being 20% of Rs. 18,36,635/- which has been disallowed by the Assessing Officer on the ground that not even a single voucher in respect of this expenditure was produced before the Assessing Officer. CIT(A) Hyderabad ought to have confirmed the disallowance of Rs. 18,36,635/- grounds raised by the department is not sustainable - In the result, assessee’s appeal is partly allowed and Revenue appeal is dismissed.
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