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2017 (9) TMI 1714 - AT - Income TaxRejection of books of accounts - estimation of income - undisclosed investments and expenditures - the assessee retracted from disclosure made during survey - AO made list of defects and rejected the books of account of assessee. The Assessing Officer on the basis of statement recorded during survey estimated the income of assessee @ 15% of the total gross contract receipts. - the rate of net profit estimated by Assessing Officer at 15% tone down to 10%. Held that:- It is an undisputed fact that the assessee has made irregularities in recording financial transactions. There are certain unexplained expenditure and investments. The assessee in grounds of appeal as agreed for estimated addition of Net profit @ 8%. Certainly, estimation of income @ 15% of gross contract receipts is on higher side and without any rational. The ld. DR has not been able to substantiate the action of Assessing Officer in adopting 15% ratio. After taking into consideration totality of facts, we are of considered view that if the estimation of net profit as proposed by Commissioner of Income Tax (Appeals) is further reduced by 1% (one percent) i.e. brought down to 9% of total gross contract receipts for all the assessment years i.e. assessment years 2008-09 to 2011-12, it would meet the ends of justice. We hold and direct, accordingly. Decided partly in favor of assessee.
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