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2013 (6) TMI 154 - AT - Income TaxDisallowance under section 40A(3) - whether any addition u/s 40A(3) can be made by making disallowance over and the above ad hoc addition made and/or when gross profit rate is applied after rejecting books results - Held that:- When estimated profit is considered after rejecting the assessee's books of account by invoking the provision of section 145(3) no separate addition can be made even under section 68 even though the assessee has failed to discharge the onus of proof in explaining the amount shown in the books of account as "market outstanding". As in the case of CIT v. P. Pravin and Co. [2004 (11) TMI 47 - GUJARAT High Court] held that once the addition has been made by increasing the gross profit rate then there is no further scope of making separate addition under different heads. A similar view has also been taken by in the case of CIT v. Banwari Lal Banshidhar [1997 (5) TMI 37 - ALLAHABAD High Court] wherein it was held that when income of the assessee was computed by applying the gross profit rate, there was no need to look into the provision of section 40A(3) of the Act. Thus CIT (A) has rightly deleted separate addition made by AO of ₹ 21,59,700 under section 40A(3)
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