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2014 (6) TMI 509 - HC - Income TaxRejection of books of accounts u/s 145(3) - estimation of sale and income – Held that:- The Tribunal was rightly of the view that the AO being not satisfied with assessee's reply because apart from not submitting the consumption ratios, even the inventory of the opening and closing stocks was not furnished - The AO held that the trading account prepared by the assessee was incorrect and incomplete and could not be relied upon - he was applying the ratio of 1:3 between grocery contention and sales holding that it was a reasonable basis - the AO held that the ratio of 1:3 was to be applied for estimating the sales made by the assessee - Taking into account the value of the purchases, opening and closing stock, the consumption by the assessee was worked out to Rs.38,77,186/- and the sales were estimated at 3 times this figure at Rs.1,16,31,558 - this was in excess of the declared sales of Rs.92,25,262/- by Rs.24,06,296/-, the difference in two figures was added to the total income as undeclared sales. The assessee had not maintained proper books of account and the same were rejected u/s 145(3) of the Act - The claim of wastage in each year depends upon various factors and cannot be applied uniformly unless the comparable circumstances are analyzed and found to be identical - This would primarily be a question of fact - there is no weight in the plea that the claim of wastage allowed to the assessee in the subsequent year be adopted – thus, no substantial question of law arises for consideration – Decided against Assessee.
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