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2017 (6) TMI 337 - AT - Income TaxRejection of books of accounts - Held that:- We confirm the order of the FAA and hold that there was no justification for rejecting the books of accounts and making ad hoc addition on account of alleged low GP.We want to mention that though the AO had alleged violation of rule 46A, yet,it was not mentioned as to which documents were produced before the FAA that were not made available to the AO.We decide first effective ground of appeal (GOA-1&2)against the AO. Addition on account of excess commission paid - Held that:- Tribunal had dealt with the issue while adjudicating the appeal for the AY.2009-10 AO has made an ad-hoc disallowance on this score on the ground that firstly, there is enhancement of rate of commission from 2.5% to the rate of 3.25%; secondly, some of the commission agents are also the relatives of the assessee. Such a basis drawn by the AO for making the disallowance cannot be sustained for the reason that, CIT(A) has clarified that overall rate of commission paid is @ 3% on the total turnover and not 3.25% and the commission has been paid uniformly to all the parties including the relatives. Out of 11 party, only 2 are relatives, therefore, it cannot be held that any unreasonable payment have been made to the relatives as compared to the outsiders. Such an ad-hoc disallowance of payment of commission made by the AO cannot be sustained and finding of the CIT(A) is thus, affirmed. - Decided against revenue.
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