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2015 (5) TMI 846 - AT - Income TaxRejection of books of accounts - AO applying the net profit rate of 1.25% - Held that:- It is an admitted fact that the AO had not pointed out any specific defect in the books of accounts maintained by the assessee in the regular course of business. It is also not brought on record that there was a difference in the sales declared by the assessee in its books of accounts vis-à-vis accepted by the Sales Tax Authority. In the present case, the AO while applying the net profit rate of 1.25% had not pointed out any specific case wherein similar net profit rate has been shown by any comparable case.We, therefore, considering the totality of the facts and are of the view that the profit declared by the assessee on the turnover of ₹ 3,99,97,585/- does not require any modification on our part. As regards to the addition on account of application of net profit rate, in the present case, it is not brought on record that the profit declared by the assessee for the year under consideration was not comparable with the profit rate declared for subsequent years which had been accepted by the ITAT. In that view of the matter we are of the view that the ld. CIT(A) rightly deleted the addition made by the AO. As regards, to the another addition of ₹ 3,10,000/- in respect of difference between the amount shown in the cash receipts issued by the assessee to M/s Krishna Store and the amount entered in assessee’s cash book it appears that the ld. CIT(A) verified from the books of accounts and the bank statement of the assessee that the transactions entered in the primary books of accounts i.e. cash book and in the bank statement was the same but those were wrongly mentioned in the receipts book. The ld. CIT(A) deleted the addition of ₹ 3,10,000/- after proper verification on the basis of verification report of ST-35 forms issued by M/s Krishna Stores giving details of the bill numbers and the amounts of respective bills which confirmed that the correct amounts involved in the two transactions were entered in the primary books of accounts i.e. cash book & ledger. We, therefore, do not see any infirmity in the order of the ld. CIT(A) on this issue. - Decided against revenue. Penalty u/s 271(1)(c) - held that:- As have upheld the order of the ld. CIT(A) in deleting the quantum addition. The said additions were the only basis for levying the penalty u/s 271(1)(c) of the Act and as the additions has been deleted, there remains no basis for levying the penalty u/s 271(1)(c) of the Act. - Decided in favour of assesse.
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