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2013 (2) TMI 438 - GUJARAT HIGH COURTReduction of the gross profit rate – AO applied the gross profit rate at 9.54% and assessee declared it at 8.5% - Held that:- the previous history of the assessee was indicative that total turnover was sustained and that whenever there was increase in the sale there was a fall in the gross profit rate – Accordingly application of 8.50% instead of 9.64% of the G.P. rate directed – Against the revenue. Discrepancy in the cash book and disallowance of brokerage, travelling expense and HRA – As decided in CIT vs. Banvari Lal Bansidhar when gross profit rate is applied that would take care of everything and there was no need for the AO to make scrutiny of the account incurred on the purchase made by the assessee – these expenses should be allowed – Against the revenue. Unaccounted cash – AO found that payment of Rs.80,000/-, was not entered into the books of account and accordingly treated as unaccounted payment and addition was accordingly made - Held that:- Once separate addition is made on account of higher gross profit, the undisclosed payment made by the assessee outside the books of account should be telescoped against the unaccounted income earned on account of higher gross profit rate – No addition should be made - Against the revenue.
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