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2020 (3) TMI 546 - AT - Income TaxRejection of books of accounts - additions on account of alleged low GP - HELD THAT:- Even when the books of accounts have been rejected by the Assessing Officer, estimation of profit should be as per the material available on record. It would not be out of place to mention here that in all the earlier Assessment Years, assessments have been framed u/s 143(3) of the Act. The g.p of the assessee ranges from 2.97% to 3.08%. We do not find any reason for adoption of g.p. rate of 10.50%. Considering the facts of the case in hand as discussed hereinabove, we do not find any error or infirmity in the findings of the ld. CIT(A). Ground No. 1 is, accordingly, dismissed. Disallowance on account of payment of commission to shareholders employees u/s 36(1)(ii) - HELD THAT:- The undisputed fact is that there is no allegation that these persons are not working for the company. In our considered opinion, it is the prerogative of the assessee to decide the remuneration etc to be paid to the persons who work for his company. As per the agreement, six directors, who were also share holders, were paid additional salary termed as ‘commission’ and there are four employees who are also share holders who also have been paid salary with additional salary termed as ‘commission’. The total commission comes to 0.5% of the total turnover. In our humble opinion, considering the nature of the business of the assessee vis-a-vis the turnover, such payment of commission cannot be doubted. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A). Thus, Ground No. 2 also stands dismissed.
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