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2018 (8) TMI 275 - AT - Income TaxAddition of suppressed sale and payments to partners - submission of ld A.R. is that if there is difference in sale between the assessee’s return of income and the figure shown in the VAT return, then the only net profit should be added and not the entire suppressed sale figure - Held that:- From the audited accounts filed before us, it is observed that the gross profit as per the audited accounts of the assessee of the year under consideration was ₹ 2.54%. We, therefore, direct the Assessing Officer to restrict the addition on account of suppressed sale to 2.54% of the said sales. Thus, this ground of appeal of the assessee is partly allowed. Disallowance of interest and salary to partners by applying section 144 read with Sec. 185 & 184 - most of the documents/information/records have been submitted during assessment proceedings - Held that:- We find that the Assessing Officer has just made general statement that the assessee has not complied with the terms of the notice u/s.142(1) of the Act. The above remark of the Assessing Officer is not only vague but also contrary to his quoted recording also. Thus, in our considered view, the Assessing Officer was not correct in holding that the assessment was made u/s.144 of the Act and consequently in disallowing deduction for partner’s interest and remuneration. We, therefore, delete the said disallowance and allow this ground of appeal of the assessee. Rejections of books of accounts u/s 145 - customers from whom advances have been received did not confirm the balances at year-end, rather he could have added those advances only instead of rejecting the books of accounts - Held that:- From the perusal of net profit shown and accepted by the department in the preceding five assessment years, we find that the highest net profit shown was 0.25%. It is an established position of law that after rejection of book results of the assessee, the Assessing Officer cannot make a wild guess but has to estimate the income of the assessee on the basis of past accepted results. We find that in assessment year 2007-08, the assessee had shown the highest net profit at 0.25%. Therefore, we modify the order of the CIT(A) and direct the Assessing Officer to compute the income of the assessee for the year under consideration by applying net profit rate of 0.25% and partly allow the ground of appeal of the assessee Disallowance of ESI contribution and EPF contribution - amounts are deposited before due date of filing the return of income - Held that:- Respectfully following the decision of Hon’ble Supreme Court in the case of Rajasthan Beverage Corporation Ltd. [2017 (7) TMI 1087 - SUPREME COURT OF INDIA], we delete the addition of ₹ 6976/- being employee’s contribution to ESI and ₹ 47,278/- being employee’s contribution to EFP deposited before filing of the return of income u/s.139(1) of the Act and allow this ground of appeal of the assessee.
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