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2021 (12) TMI 640 - AT - Income TaxNet profit estimation - Rejection of books of accounts - HELD THAT:- Only Reasons for rejection of books of accounts being fact that no reply was received from certain creditors in response to notice u/s 133(6) of the Act could not have resulted into the rejection of books of accounts. Assessee has produced confirmations of those parties and no additions were made on account of creditors. Even otherwise, if a sundry creditor does not provide a confirmation u/s 133(6) of the Act, we do not find any reason to uphold the rejection of the books of accounts on that basis. The assessee has also produced the comparative chart of the gross profit for a block of 5 years starting from assessment year 2012-13 onwards. The assessee has produced assessment orders of other parties and shown a chart wherein the net profit has been accepted in the case of the other assessee in same line of business @ 0.43%. We find that the rejection of the books of accounts by the ld. AO is not proper without finding any latent, patent and glaring defects in the books of accounts of the assessee. Accordingly, we direct the ld. AO to delete the addition made of 8% of the net profit and to accept the book results shown by the assessee. Accordingly, grounds Nos. 1 – 3 of the appeal of the assessee are allowed.
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