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2017 (1) TMI 323 - AT - Income TaxAddition to the assessee’s profit by rejecting the books of account and estimating 8% profit on the total turnover - CIT(Appeals) has sustained the addition on the ground that the assessee has not been able to reconcile and explain the difference found between the said tentative profit and loss account and the actual profit and loss account - Held that:- In our considered opinion the tentative profit and loss account found during the course of survey alone cannot be a basis for making an addition of huge amount of ₹ 3.43 crores. Dehorse any other corroborative evidence of suppressed sale or booking of any bogus expenditure, this addition is not sustainable on the anvil of Hon’ble Apex Court decision in the case of S. Khader Khan (2007 (7) TMI 182 - MADRAS HIGH COURT ). If the assessee’s books of account are found to be not reliable, the accepted and permissive course of action in this regard is estimate of profit by applying the prevalent rate of profit in the industry and/or past results of the assessee. Hence this addition solely based upon a tentative trading/contract works account for the period 01-04-2011 to 07-02-2012 found at the time of survey alone in absence of any books of account or other documents found is not at all sustainable. Since no evidence whatsoever with regard to finding regarding suppressed sale has been brought on record and the AO has rejected the books of account, we are of the opinion that the addition by the AO by applying 8% gross profit as in earlier years is required to be restored and the addition of R.3,43,24,120/- based upon the tentative trading account found on survey is liable to be deleted.- Decided in favour of assessee Disallowance u/s 40(a)(ia) - it is the assessee’s plea that the sums involved have been paid by the end of the year and no amounts are outstanding - Held that:- As decided in case of M/s Chadda Transport [2016 (3) TMI 1019 - ITAT NAGPUR ] Since we have already held that the provisions of section 40(a)(ia) were not attracted inasmuch as no amount was payable as on the close of the year as well as in absence of any contracts, there was no obligation on the part of the assessee to deduct the tax at source - Decided in favour of assessee
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