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2018 (4) TMI 22 - AT - Income TaxRejecting books results and estimating profit at 12% of the turnover - non discharge of the onus of proving genuineness of commission payment - Held that:- Existence or otherwise of proprietary concern is of no relevance as the AO has considered total turnover of 5 concerns. This issue has no bearing on rejection of books of account. But we find that the assessee has not discharged the onus of proving genuineness of commission payment which can be valid reason to reject book results and resort to estimation of profit. AO cannot indulge in wild guess work for adopting the rate of profit. It is now trite law that the rate of profit should be based on past history of the assessee or the profit earned by assessee in similar line of business, whereas in the present case, though the AO referred to profits shown in the immediately preceding year, these figures were disputed by the assessee stating that the AO had not considered net profit rate of assessment year 2004-05, considered only net profit of assessment year 2002-03 and 2003-04 - we remit this issue back to the file of the AO to adopt rate of profit based either on past history or by comparable profits of concerns in the similar line of business. - Decided partly in favour of assessee for statistical purposes.
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