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2014 (5) TMI 78 - AT - Income TaxRate of profits – Held that:- The facts have been completely ignored by the AO while applying flat rate of profit, even in a case where the net profit has to be applied, the same has to be reasonable - it shall be reasonable to apply flat net profit rate of 1.25% on the gross receipts of the assessee as against the profit rate of 4,7% applied by the AO – the AO is directed to determine the taxable income accordingly – Decided partly in favour of Assessee. Penalty u/s 271G of the Act – Quantum addition – Bonafide submissions made by assessee - Assessee did not submit any information or documentation as required under section 92D(3) of the I.T. Act - Held that:- From the Affidavit of the director of the Assessee submitted the Assessee in connection with the condonation of delay, it is seen that the Branch operations of the Assessee closed down in the month of December 2006 and no further business activities have stated to have taken place in the Branch - during the course of assessment proceedings, Assessee had submitted that it was not liable to tax in view of the provisions of section 9 of the Act and since it was not liable to tax it was also not required to maintain the documents required for Transfer Pricing - The submissions made by the Assessee appears to be bona-fide more so when the same has not been controverted by Revenue by bringing any contrary material on record - the Assessee was having a reasonable believe of not being liable to tax which has not been controverted by Revenue – thus, the Assessee is not liable for penalty u/s 271G of the Act – Decided in favour of Assessee.
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