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2023 (3) TMI 1189 - ITAT KOLKATAAddition on comparative loss with profit of last years - undisclosed profit - profit was lower and the ld. AO made the addition on the estimated basis by applying average of last three years book profit/turnover ratio - Non rejecting the books of accounts u/s 145(3) - HELD THAT:- AO made the addition on the estimated basis without having rejected the books of accounts filed by the assessee at the time of hearing before him as the accounts maintained by the assessee were duly audited u/s 44AB of the Act and all purchases and sales were recorded in the books of accounts too and when books of accounts were not rejected as decided in the case of Swadeshi Commercial Co. Ltd. [2008 (12) TMI 823 - CALCUTTA HIGH COURT] held that gross profit cannot be estimated. In the instant case, AO has not pointed out or any discrepancy in the books of accounts filed by the assessee and the AO has no evidence to come to a conclusion that the assessee has undisclosed profit. The entire addition was made surmises and conjectures - assessee has explained the issue with facts and figures, under these facts and circumstances, the addition made by the assessing officer as sustained by the CIT(A) is bad in law. In view of the discussions made above, we delete the addition made by the ld. AO and set aside the order passed by the ld. CIT(A) by allowing the appeal filed by the assessee.
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