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2013 (3) TMI 221 - HC - Income TaxDisallowance u/s 40A(3) - AO disallowed 20% of the purchase price alleged to be paid in cash in respect of alternative purchases & also rejected books of account and estimated 6% extra profit in respect of purchases made from Kothari Group - Held that:- CIT (Appeal) and the Tribunal, for deleting the said disallowance, placed reliance on the judgment of this Court in the case of Commissioner of Income Tax Vs. Purshottamlal Tamrakar [2003 (3) TMI 10 - MADHYA PRADESH HIGH COURT] wherein held that Section 40A(3) is not applicable when the net profit rate was applied by the AO and once a net profit rate is applied the expenses are deemed to be considered while applying the net profit rate. As in the present case also net profit rate was applied by the AO there was no scope for further disallowance of any expenditure - no substantial question of law arises in the matter - against revnue.
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