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2013 (3) TMI 52 - HC - Income TaxRejection of Books of Accounts & invoking the provisions of section 145(1) - AO applied a net profit of 6% which was disclosed by the other assessees in the same business as the net profit disclosed by the assessee was too low - Held that:- The provisions of section 145(1) could be invoked only when any defect is pointed out in the maintenance of books of account and other documents. Thus mere disclosure of a low net profit would not enable the AO to invoke the provisions of section 145(1) in all cases unless and until any defect has been pointed out in the maintenance of books of account otherwise, in the cases where the business has been running in loss, in all such cases, the AO would be entitled to invoke the provisions of section 145(1) and hold that the business is always running on profit which is not the scheme of the Act - in favour of assessee.
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