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2014 (1) TMI 398 - HC - Income TaxEstimation of net profit rate - Held that:- The Tribunal has found that for AY 2005-06 where assessment was completed under Section 143(3) of the Act, the AO had adopted a net profit rate of 3.1% (the assessee had declared a net profit rate of 2.1%) whereas for the assessment year under appeal the assessee had declared a net profit rate of 4.5%, the CIT (A) has adopted a rate of 7% - The Tribunal has declined to interfere on the ground that even in the case of a best judgment assessment it is well settled that the Assessing Officer cannot act capriciously and the assessment has to be made on the basis of previous history, local knowledge and the circumstances pertaining to the assessee. Unexplained credit - Held that:- During the stage of the remand proceeding, the assessee had filed by way of affidavits confirmations from the creditors. Subsequently, three remaining creditors had also filed confirmations - The Tribunal has compared the same with the list of sundry creditors in the balance-sheet for the earlier year ending on 31 March 2007 - It has been found that the creditors have provided building material for civil construction work and road roller and JCB machine for the use of the business activities of the assessee - If some outstanding amount was left due at the end of the financial year, which was confirmed by the creditors, this could not be regarded as an unexplained liability - Decided against Revenue.
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