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2016 (5) TMI 355 - AT - Income TaxRejection of books of accounts - estimation of profit - Held that:- Additional Commissioner has nowhere mentioned as to why the working given by the assessee cannot be accepted. More so, he has not given any reasoning as to how the duplicate entries taken in Annexure-A/7 as well as in the books, would be taken care. He simply treated Annexure-A/7 as gospel truth. On the other hand, the ld.CIT(A) has ironed out the anomalies or the error in the entries in an Annexure-A/7. We do not find any error in the finding of the ld.CIT(A) to this extent. The next aspect is application of net profit rate. On one hand, the assessee is armed with two sets of circumstances, viz. (i) net profit rate accepted by the Settlement Commission, after a discussion with both the parties, and secondly, average net profit rate as worked out on the basis of entries recorded in the books as well as as worked out in Annexure-A/7. The average in Annexure-A/7 is 3.44% of the entries mentioned therein. In our opinion, ends of justice would meet, if we apply net profit rate at 5% of the unaccounted sales accepted by the ld.CIT(A). The ld.AO is directed to re-work out the income of the assessee on the basis of 5% net profit rate on the sales worked out by the assessee and accepted by the CIT(A) in both these years.
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