Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (6) TMI 1310 - AT - Income TaxRejection of books of accounts - estimation of net profit rate after the books of accounts have been rejected - assessee firm declared NP rate of 11.44% - HELD THAT:- Instead of specific disallowances, the ld CIT(A) as well as Tribunal have considered the position of net profit rate offered by the assessee and have thereafter directed to apply net profit rate of 11.5%. As we have held above, keeping the past history of the assessee into account, the net profit rate of 11.5% is upheld for the impunged assessment year. Further, the past history of the assessee doesn’t suggest disallowance of third party interest either by the AO or by the Coordinate Benches. The Coordinate Benches have compared net profit rate as offered by the assessee which is claimed to be before depreciation, remuneration and interest payment to partners as well as interest to third parties and thereafter, directed to apply 11.5%. For the impunged assessment, we see no reason to deviate from the said settled position as both Revenue and the assessee has relied on the past history as we have discussed above. AO is directed to apply net profit rate of 11.5% before depreciation, remuneration and interest payment to partners and interest to third parties (bank). Accordingly, there would not be any further disallowance of interest paid to third parties - Appeal of the assessee is partly allowed.
|