Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (7) TMI 1380 - AT - Income TaxRejection of books of accounts u/s 145 - Estimation of Gross profit - AO after rejection of books of accounts has estimated G.P. @17.20% as against G.P. @13.19% declared by the assessee - HELD THAT:- In view of the specific observations of the auditors in terms of inconsistency in maintaining the books of account and not following the well accepted accounting principles and the Coordinate Bench decision in assessee’s own case for A.Y. 2008-09 [2014 (11) TMI 1015 - ITAT JAIPUR]wherein on similar basis the books of accounts were rejected, we see no reason to interfere with the order of the lower authority in terms of rejection of the books of accounts. Regarding estimation of G.P. rate, wherein the books of accounts are rejected, a fair estimate is required to be made by the Assessing Officer. The principle of average taking into consideration last 5 years past history is clearly a robust and fair basis of estimation to determine the gross profits for the year under consideration. The average G.P rate of last 5 years as finally affirmed comes to 13.58%. The AO is accordingly directed to apply the G.P. rate of 13.58% as against G.P rate of 13.19% declared by the assessee. Addition u/s 40(a)(ia) on account of non-deduction of TDS on payment made to Export Promotion Council for handicraft working under Ministry of Commerce and Industry for export trade fair - HELD THAT:- We find that no information was submitted before the Assessing Officer on the nature of payment - CIT(A) upheld disallowance stating that the assessee has not filed any receipt/document which suggested that the payment is towards registration cum membership charges. Before this Bench, the assessee has submitted that the payment has been made to Export Promotion Council of which assessee is a member for booking of stall area at New Delhi and the payment is not liable for TDS in terms of section 196 of the Act. Alternatively it was submitted that the payment is liable for TDS u/s 194(I) and since the payment is less than the threshold of ₹ 1.8 lace. There is no liability towards TDS and accordingly the addition made by the Assessing Officer may be deleted. Firstly regarding the applicability of section 196 of the Act, there is nothing on record to suggest that Export Promotion Council is exempt from payment of income tax. Hence, in absence of the same, we are unable to accede to the contention of the ld. AR that no TDS is liable on the subject payment. Regarding the alternative contention of the ld. AR regarding applicability of section 194(I) assessee is taking varying contention regarding exact nature of payment. No evidence is available on record to determine the exact nature of payment – whether its towards membership fees or towards participation in trade fair and stall booking or both. Accordingly, we are setting aside the matter to the file of the AO to examine the exact nature of payment and decide the matter a fresh as per law. Hence, the ground no. 2 of the assessee’s appeal is allowed for statistical purposes. Addition u/s 69A in respect of cash deposit in personal saving bank account maintained by the assessee - HELD THAT:- We are setting aside this matter to the file of the AO to examine the above books of accounts to determine the source of cash deposit in the personal bank account of the assessee. We are not getting into the merit of the matter and the contentions raised by the assessee explaining the source of deposits as the same has not been examined by the AO. The appellant is at liberty to raise its said contentions before the AO and the AO will examine the same and give his findings as per law. In the result, the ground is allowed for statistical purposes.
|