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2023 (8) TMI 446 - AT - Income TaxEstimation of income - Unexplained purchases - assessee had purchased the goods in question at a discounted value from some supplier/suppliers operating in open/grey market - quantification of the profit by procuring the goods in question at a discounted value from the open/grey market - unaccounted income for carrying the business outside his books of accounts on an estimate basis - HELD THAT:- Once the books of account of the assessee had been rejected by the A.O u/s.145(3) then, he could not have thereafter relied upon the said rejected books of accounts for making additions by separately disallowing any part of the ledger head expenses, but at the same time, are unable to persuade ourselves to subscribe to the part-rejection/rejection of the books of account of the assessee by the lower authorities for the standalone reason that the assessee could not verify/substantiate to the hilt the purchases of Rs. 31 lacs (out of total purchases of Rs. 58.13 crore made during the year) i.e. 0.53% of the total purchases and thus, set-aside the part-rejection/rejection of the books of account u/s.145(3) of the assessee by the lower authorities. As observed by us hereinabove, the A.O had made certain independent additions/disallowances, viz. addition of unaccounted railway rack booking charges, disallowance of unverifiable labour expenses, disallowance of unverifiable hamali expenses and disallowance out of office expenses, car and vehicles which thereafter, were telescoped by the CIT(Appeals) by applying the NP rate (average) of 1.45% to his total turnover for the year under consideration. As we have set-aside the aforesaid methodology adopted by the CIT(A) for computing the assessee’s income, therefore, as a consequence thereto the aforesaid issue is also restored to the file of the A.O for fresh adjudication. Appeal of the assessee is partly allowed for statistical purposes
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