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2023 (10) TMI 365 - ITAT KOLKATAEstimation of net profit - estimating the profit @ 10% of the turnover without rejecting books of accounts of assessee - HELD THAT:- We find that the assessee is a partnership firm engaged in the business of trading in jute, fertilizers, seeds etc. In the preceding past two financial years, net profit declared was 0.22% and 0.19% arrived at after claiming of incidental expenses including the interest in remuneration paid to partners. The preceding two financial years are on the basis of audited financial statement and the same has not been controverted by the revenue authorities. So far as the year under consideration is concerned, we notice that better net profit rate i.e. 0.49% has been declared. As per judicial precedence, normally average of 3 years profit rate / gross profit rate is adopted to estimate the income. However, since the assessee did not appear before the lower authorities, we estimate the net profit @ 0.50% and applying the same on the turnover of the assessee, the net profit will amount to Rs. 10,83,808/- and accordingly, the income shall be calculated and remaining addition stands deleted. Thus, ground no. 6 & 7 are partly allowed. Addition of interest income - As we notice that the said interest income is duly disclosed in the books of account and the net profit rate of 0.49% is after considering the said interest income and since we have held to apply net profit rate of 0.50%, it inter alia will take care of interest income of Rs. 1,55,791/- and, therefore, no separate additions is required to be sustained at Rs. 1,55,791/-. Thus, ground of assessee’s appeal is allowed.
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