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2015 (9) TMI 754 - HC - Income TaxIncome from undisclosed sources - assessee failed to offer any explanation whatsoever regarding the source of investment in such suppressed purchases - application of N.P. rate - ITAT deleted the addition - Held that:- 0nce the books of account were rejected, the best method of estimating the income of the appellant was to apply the net profit rate on the total purchases of the appellant. Since only the total purchases were verifiable the appellate authority found that the rate of 6% towards profit rate was fair and reasonable. We also find that the first appellate authority considered the practice adopted in this trading of rubber and held that person who intend to buy natural rubber, who do not have licence approaches the person who is having the licence, which in the instant case was the assessee who made the purchases on behalf of these unlicensed traders and consequently held, that in such a situation the addition on account of unexplained purchases made not be in order. This finding being based on appreciation of evidence requires no interference. In the light of the aforesaid, we are of the opinion, that the deletion of suppressed purchases was rightly made by the first appellate authority and was also justified in estimating the income by applying a net profit rate of total purchases made by the assessee. - Decided against revenue.
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