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2017 (7) TMI 67 - AT - Income TaxEstimation of earnings by the assessee - net average profit computation - number of vehicles processed by the assessee for the purpose of obtaining loan - AO computed the income by applying the average profit per Rikshaw - Held that:- Assessing Officer computed the income by applying the average profit per Rikshaw as net commission and no further expenses were allowed in the hands of assessee. However, the CIT(A) allowed the deduction on account of First Category of expenses and no deduction was allowed on account of Second Category of expenses. The estimation of earnings by the assessee is based on the material found from the possession of assessee in assessment year 2003-04 for some of the vehicles and in view of the evidence found during the course of search, the estimation worked out by the Assessing Officer merits to be applied. However, to meet the ends of justice and keeping in mind the fact that on the basis of documents seized, the estimation for assessment year 2006-07 at ₹ 8,888/- is lower than the estimation for assessment year 2005-06 at ₹ 9,571/- which is not possible. Keeping in mind the principles of natural justice, we direct the Assessing Officer to adopt the average profit per Rikshaw in the hands of assessee in assessment years 2001-02 to 2003-04 @ ₹ 6000/-, for assessment years 2004- 05 and 2005-06, the same may be adopted @ ₹ 6,500/- and for assessment years 2006-07 to 2008-09 @ ₹ 7,000/- per vehicle.
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