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2016 (4) TMI 551 - ITAT DELHIPurchases doubtful - Estimation of commission income @1% of total purchases - as per AO the assessee was not running regular business but only providing accommodation entries since assessee failed to substantiate sales - CIT(A) deleted the addition - Held that:- The assessee has furnished VAT return and VAT audit report. The total turnover declared before the VAT authorities are tallied with the turnover declared in the Income-tax return. The assessee has taken cash credit loan from PNB, Punjabi Bagh, New Delhi against hypothecation of stock. As per submissions, he has fulfilled the requirement of bank against cash credit loan taken. Therefore, the purchase and stock declared before the bank cannot be questioned. After going through the AO’s order and the paper book submitted, we observe that the Inspector has submitted wrong report. Regarding very low amount of depreciation, the assessee was carrying his business since last many years, therefore, their WDV has gone down. The AO has computed 1% income on total purchases on estimate basis whereas the accounts of the assessee have been audited by the Chartered Accountant and submitted the tax audit report in appropriate form and the Assessing Officer has not disturbed the financial results. The sales and purchase invoices were produced before the AO, but he did not reject any single paper and accepted the same. He issued notice u/s. 133(6) to the creditors, bankers and all have responded to the AO. The major part of the purchases was from Anshika jewellers, the sister concern and payments were made directly to the MMTC Ltd., which is a government organization. Therefore, no interference is called for in the well reasoned order passed by the ld. CIT(A). - Decided against revenue
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