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2020 (8) TMI 807 - AT - Income TaxPeak credit addition - addition by way of applying higher net profit rate - undisclosed bank account held with ICICI Bank - HELD THAT:- Physical stock and cash in hand in the regular books have been utilised for making un accounted sales. It is noteworthy that the assessee is carrying out of books sales transactions in the past also and till the date of peak bank balance on 28.2.2014 the profits earned on unrecorded sales have been offered to tax and they form part of the peak bank balance. As against peak balance found in the bank account not disclosed in the regular books in the instant case three things have to be considered, firstly stock in hand available with the assessee, secondly cash in hand available in regular books and thirdly the undisclosed profit earned on the unaccounted sales till the date of peak balance which have been offered to tax. In the instant case the peak balance in the undisclosed ICICI bank account is much less than the total of stock in hand, cash in hand and unaccounted profits offered to tax. Considering judicial precedence find no inconsistency in the finding of Ld. CIT(A) deleting the peak credit addition. Rejection of books of accounts - Addition made by enhancing net profit - AO applying net profit @2.5% as against the net profit disclosed by the assessee @0.73% - CIT-A deleted the addition - HELD THAT:- Action of the A.O rejecting the book results thereby invoking provisions of section 145(3) was not justified and so was also not justified in estimating the net profit on the regular turnover in the books of accounts @2.5% as against 0.73% offered by the assessee. Application of 2.5% on undisclosed turnover cannot be equated to be applied on the regular turnover disclosed by the assessee. In the immediately preceding assessment year 2013-14 assessee has offered 0.91% as net profit rate which has been accepted by the revenue. No reason to interfere in the finding of Ld. CIT(A) deleting the addition of ₹ 67,76,734/- and we also find no justification in the action of the Ld. A.O rejecting the books of accounts u/s 145(3) of the Act. - Decided in favour of assessee.
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