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2020 (5) TMI 139 - AT - Income TaxAddition based on survey statement - rejection of books - addition based on statement recorded and diaries impounded during survey, without verifying the veracity of the same - HELD THAT:- Admittedly, a diary was found during the course of survey recording the transactions of receipts. Undisputedly, part of the transactions were disclosed in the regular books of accounts as business receipts. There is no dispute about the fact that the diary found during the course of survey belongs to the assessee in pursuance to the provisions of section 292C. Similarly the contents of such diary are also true as per the provisions of section 292C. This fact has not been disputed by assessee at the time of hearing before us. Thus it is proved beyond doubt that the diary belongs to the assessee and its contents are true. Determine the income of the assessee based on the contents recorded in such diary - Only element of profit embedded in such business receipts which can be added to the total income of the assessee. Rate of profit should be adopted for determining the income - Assessee has given a chart showing the amount of profit for the last 3 years along with detail of its sister concern namely Sanvira Infrastructure engaged in similar line of business and there average profit comes at 6.29% and 7.27% respectively. In our considered view average profit of sister concern will be justifiable as the same is showing profit in all 3 year where as the assessee is showing profit in current year only. We set aside the finding of the CIT (A) and direct the AO to tax the element of profit embedded in such business receipts at the rate of 7.21% by treating the same as net profit chargeable to tax. The ground of appeal of the assessee is partly allowed.
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