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2018 (1) TMI 710 - AT - Income TaxEstimation of net profit - rejection of books of accounts - adoption of net profit rate of 5% in the instant case - Held that:- It is an admitted fact that the assessee has maintained books of account which were duly audited and the auditors have not pointed out any defect in the books of account. There is also no qualification by the auditors regarding any defect on account of non-maintenance of stock register in a particular manner. It is also an admitted fact that the valuation of stock on a particular date cannot be correctly determined in absence of maintenance of stock resister of timber on the basis of shape, size, quality, colour, etc.. Therefore, rejection of book results under the facts and circumstances of the case is justified. Adoption of net profit rate of 5% in the instant case without bringing any comparable case/cases of similar nature in the same locality is also highly arbitrary under the facts and circumstances of the case. The argument of the ld. counsel for the assessee that since the purchase and sales along with quantity are matching and there is no evidence that the assessee has received anything more than whatever has been shown as sale cannot be accepted in absence of maintenance of the stock register on the basis of quality, shape, size, colour, etc.. Considering the totality of the facts of the case, we are of the considered opinion that lump sum addition of ₹ 5,00,000/- on estimate basis for possible leakage of revenue under the facts and circumstances of the case as against the estimation of net profit at 5% by the Assessing Officer and upheld by the ld. CIT(A) in the instant case will meet the ends of justice - Decided partly in favour of assessee
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