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2022 (7) TMI 549 - AT - Income TaxRejection of books of accounts - Estimation of income @ 20% of the stock put to sale - HELD THAT:- Admitted facts are that the assessee failed to produce any evidence in support of sales made and hence the AO rejected the books of account and estimated the income @ 20% of the stock put to sale. The reliance placed by the Ld. AR in the decision of the Coordinate Bench of the Tribunal in the case of Majji Naga (2016 (6) TMI 1449 - ITAT VISAKHAPATNAM] and Tangadu Jogisetty [2016 (6) TMI 1449 - ITAT VISAKHAPATNAM] deserves consideration. Respectfully following the decisions of the Coordinate Bench of the Tribunal we hereby direct the AO to estimate the net profit @ 5% of the purchase price of the stock which was put to sale which is net of deductions. Accordingly, ground no.3 raised by the assessee is partly allowed. Payment of license fee - AO has disallowed 1/3rd of the license fee based on the facts that no receipt was provided by the assessee - HELD THAT:- The assessee also did not file any objections for the remand report by the AO. We note here that for running an IMFL shop any person needs to pay license fee to the Government on annual basis - AO has not disputed the fact that the assessee is in the business of running a wine shop and whereby the License fee is required to be paid in accordance with the guidelines of the respective State Government. Merely on the basis of absence of evidence in respect of the payment of license fee it cannot be said that the assessee has not paid any license fee for running the business. Therefore we are of the considered view that the Revenue Authorities erred in disallowing the same. Accordingly, the relevant ground raised by the assessee is allowed.
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