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2013 (11) TMI 211 - AT - Income TaxAdjournment of hearing - Held that:- The assessee had more than one month after service of notice of hearing to prepare for the hearing and be ready to attend on the date of hearing. It is in the interest of both the parties if the appeal is disposed of at the earliest as all the relevant facts/details including legal position governing the issue are on record. - In view of the aforesaid, the application for adjournment was rejected and the factum of rejection was announced in the open court. Nobody entered appearance on behalf of the assessee. On the facts found by the AO/CIT(A) and the law applicable to those facts, it was felt that the appeal could be disposed of on merits after rejecting the application for adjournment. Undisclosed income - Suppression of profit - CIT restricted addition to 30% of profits only - Held that:- The assessee has invoked real income theory in support of its claim for exclusion of 80% of the impugned sum from net profit as shown in the audited profit & loss account. According to the assessee, the element of real profit in the impugned sum was only 20% and therefore only 20% was offered by it to tax. Let us therefore examine as to whether net profit as shown in the audited profit & loss account is real profit or illusory profit. Real profits are those which are not illusory. In the case before us, the assessee has indeed collected the impugned sum in cash on sale of plots. Such collections are not illusory. They are real and represent the return in money in the hands of the assessee from its own business. When a return is furnished and accounts are put in, in support of that return, the accounts should be taken as the basis for assessment and that an assessee cannot discard his own profit & loss account and balance sheet and more particularly the Audit Report in Form No.3CB signed by a Chartered Accountant in terms of section 44AB of the Income-tax Act. Apparent state of affairs shown in the profit & loss account would have to be treated as real unless the contrary is proved. It is reiterated too often by the courts/tribunals that the onus to prove that the apparent is not real is on the party who claims it to be so. The assessee has not discharged the aforesaid burden Application of rate of net profit is one of the methods to assess the income of an assessee where the books of account maintained by the assessee are found by the AO to be incorrect or incomplete or not in conformity with the accounting standards notified by the Central Government or in the circumstances mentioned in sub-section (3) of section 145. In the case before us, neither the AO has invoked section 145(3) nor has the assessee led any evidence to prove that the items shown in the books of account or profit & loss account and balance sheet drawn on that basis are incorrect. Therefore, the question of application of rate of net profit, be it 20% or 30% of the impugned sum, does not arise on the facts of the case before us. Having admitted in the profit & loss account that the impugned sum represents part of its net profit from the operations of business, the assessee cannot be allowed to plead that the said net profit should not form the basis for assessment of its income and tax thereon. There cannot be two sets of net profits: one for the general public, financial institutions, stakeholders and for distribution amongst partners and the other for income-tax authorities. The assessee has deliberately suppressed and thereby concealed the particulars and/or furnished inaccurate particulars of its true income in the return of income by claiming deduction to the extent of 80% with full knowledge that claim for such deduction was inconsistent with its own audited books of account and statutory provisions of the Income-tax Act and therefore completely untenable on facts and in law. It is an open and shut case of bogus claim for deduction to the extent of 80% of the impugned sum so as to evade payment of legitimate taxes due to the State - Decided in favour of Revenue.
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