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2015 (8) TMI 1028 - AT - Income TaxRate of gross profit(GP)in respect of textile business and iron & steel business - AO Rejected the books of account and adopted the G.P. rate @20% in respect of textile business and 10% in respect of Iron and Steel business - FAA reduced the GP to 15.20 % in case of textile business and @ 3% for iron and steel business - Held that:- Identical issue has been adjudicated by the Tribunal,while deciding the appeal for the AY.2007-08 [2013 (4) TMI 724 - ITAT MUMBAI]. Respectfully,following the order of previous year we direct the AO to compute the income of the assessee by adopting GP rate of 15% and 5% respectively for the textile business and for the iron and steel business. - Decided partly in favour of assessee. Addition made u/s.41(1) - Held that:- Addition was made by the AO u/s.41(1)of the Act,that the AO had held that the creditors were not available on given addresses,that the FAA had called for a remand report from the AO with regard to the claim made by the assessee about payment made to the creditors in subsequent years,that in the remand report the AO had not mentioned anything about on the spot inquiry by the inspector,that there was change in office of the FAA,that the new FAA passed the order where he mentioned about the inquiry conducted by the inspector,that the ledger accounts of the parties show that the assessee had paid the money to the creditors in subsequent years.Once the payment to the creditors is proved by necessary documentary evidences there is no justification for sustaining the order of the FAA.Therefore,reversing his order,we decide grounds in favour of the assessee. Ad-hoc disallowance of expenditure - Held that:- AO had made a disallowance of 20%of the expenses incurred under five heads.Out of the five heads four are related with motor car and telephone.We agree that element of personal use of car and telephone cannot be ruled out. However,to meet the end of justice disallowance is restricted to 10% for the four items i.e. except the welfare expenses. - Decided partly in favour of assessee.
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