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2018 (4) TMI 1526 - AT - Income TaxAddition in Biri Account by applying an adhoc rate of profit/commission of 2% on the purchase of Biri - non rejection of books of accounts - Held that:- AO had not rejected the books of accounts by invoking the provisions of Section 145. He made the addition by presuming that the assessee might have earned the commission @ 2% on the purchases. At the same time, he had not doubted the sales made by the assessee from the purchases. Even, the AO had considered that the gross profit amounting to ₹ 2,96,758/- was earned by the assessee from the sale of Biri. Thus when the sales has been accepted as genuine then the AO was not justified in presuming that the assessee earned commission on the purchases of goods (Biri) - neither the AO nor the ld. CIT(A) had given any basis for adopting the rate of Commission/Profit at 2%, therefore, the addition made by the AO and sustained by the CIT(A) was not justified. Accordingly, the same is deleted. - Decided in favour of assessee.
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