Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (3) TMI 520 - AT - Income TaxRejection of books of accounts - Estimation of total income - addition at 25% of the gross receipt of the assessee by AO - CIT(A) restricting the addition by estimating the net profit @ 1% of the total turnover - HELD THAT:- CIT(A) has noted that the assessee has at an average returned profit of 0.03% in the preceding two years which is verifiable from the Tax Audit Report placed on record and which was not disputed by the A.O. in remand proceedings. CIT(A) has also taken note of the submissions of the counsel of the assessee before him that in the line of business in which the assessee indulged in the wholesale trading business of white paper and craft paper used for packaging, the net profit varies from 1% to 3%. CIT(A) also took note of the fact that in the impugned year, the assessee had claimed bad debts written off to the tune of ₹ 1,85,52,149/- which further reduced its net profit. He noted that the A.O. had accepted the allowability of this claim to the extent of ₹ 1,19,95,434/- subject to the condition that the income with respect to the same was offered by the assessee in previous year which the A.O. noted that the fact on record. Therefore considering the exceptional item of bad debts written off and the submissions of the assessee, he held a net profit rate of 1% of gross sales to be reasonable and justified. D.R. has been unable to controvert any of the facts found by the ld. CIT(A) as above vis-à-vis the net profits returned by the assessee in its line of business as also the claim of bad debts written off. Moreover he was unable to justify 25% net profit rate, in the backdrop of the aforesaid facts. We find the estimation of net profit by the Ld. CIT(A) @ 1% of the gross turnover to be justified and reasonable and see no reason to interfere in the same. We therefore uphold the order of the Ld. CIT(A) estimating the income of the assessee by applying the net profit rate of 1% to be gross turnover of the assessee. - Decided against revenue.
|