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2016 (5) TMI 1477 - AT - Income TaxAddition on account of undisclosed investment and on account of gross profit earned on estimated profits - Held that:- CIT(A) is not justified in sustaining the addition of ₹ 1,32,000/- by applying G.P. rate on the alleged sales. Under the Income Tax Act, addition on account of Net profit rate can be made for the purpose of assessment and not on the basis of G.P. Rate. As such, the addition of ₹ 1,32,000/- confirmed by the CIT(A) is deleted. It is also pertinent to mention here that where N.P. rate is applied, no separate addition can be made on account of purchases made outside the books of account. Therefore, the addition of ₹ 1,00,000/- sustained by the CIT(A) on account of undisclosed investment for making undisclosed sales is deleted. - Decided in favour of assessee.
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