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Income Tax - Case Laws
Showing 181 to 200 of 783 Records
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2017 (3) TMI 1610 - ITAT COCHIN
Entitled for deduction u/s. 80P(2)(a)(i) - Interest earned by the assessee from its deposits placed in Sub-Treasury and banks - Held that:- It may be true that for application of Sec. 80P(2)(a)(i) of the Act assessee was considered as a primary agricultural credit society based on certificate issued by Joint Registrar, Kottayam. In our opinion para 3.2 of the circular reproduced above has accepted the judgment of Hon’ble Apex Court in the case of CIT vs. Nawanshahar Central Cooperative Bank Ltd [2005 (8) TMI 28 - SUPREME COURT OF INDIA], as correct for cooperative societies /banks claiming deduction u/s. 80P(2)(a)(i) of the Act. In other words, the Board has taken a view that interest earnings of a cooperative society which was having as its primary business, providing credit facilities to its members who were agriculturists, could be considered under the head income from business and not from income from other sources.
We are of the opinion that assessee has to succeed in this appeal. Interest earned by the assessee from its deposits placed in Sub-Treasury and banks are eligible for deduction u/s. 80P(2)(a)(i) of the Act. See Kizathadiyoor Service Cooperative Bank Ltd vs. ITO [2016 (7) TMI 1405 - ITAT COCHIN] - Decided in favour of assessee.
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2017 (3) TMI 1607 - BOMBAY HIGH COURT
Set off of unabsorbed depreciation - whether to be dealt with in accordance with the provisions of Section 32(2) of the Income Tax Act as amended by Finance (No.1) Act, 2001 and not by the provisions of Section 32(2) as it stood before the said amendment? - Held that:- The issue arising in the present appeal stands concluded against the Revenue and in favour of the respondent-assessee by the order of this Court [2016 (7) TMI 1245 - BOMBAY HIGH COURT] as held that the unabsorbed depreciation for the Assessment Year 1997-98 upto Assessment Year 2001-02 could be allowed to be set off, if it was still unabsorbed on 1st April, 2001. CBDT circular No.14 of 2001 dated 22nd November, 2001 hold that any unabsorbed depreciation which is available on 1st day of April, 2001 would be dealt with in accordance with the provisions of Section 32(2) of the Act as amended by the Finance Act of 2001. Moreover, the Circular No.14 of 2001 issued by the CBDT clarifies that restriction of eight years to carry forward and set off the unabsorbed depreciation has been dispensed with. Consequently, unabsorbed depreciation for the intervening periods between assessment 1997-98 upto 2001-02, if available in the assessment year 2002-03 would be allowable as part of carried forward depreciation from Assessment Year 2002-03 onwards. - Decided in favour of assessee.
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2017 (3) TMI 1604 - ITAT CHENNAI
Reopening of assessment - reasons to believe - Held that:- It is clear that the reasons recorded for re-opening of the assessment was already examined by the AO in the assessment made u/s.143(3) r.w.s.147 of Income Tax Act on 30.12.2010 and the Ld.AR submitted that no fresh material is available to the AO to re-open the assessment. The Revenue could not establish that the income has escaped assessment due to the failure on the part of the assessee. Therefore, we hold that the notice issued u/s.148 lacks jurisdiction and the same is quashed. Appeal of the assessee is allowed.
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2017 (3) TMI 1581 - ITAT, MUMBAI
Penalty u/s 271(1)(c) - whether when substantial question of law has been framed and admitted, therefore, the issue has become debatable, therefore, penalty is not leviable? - Held that:- The Hon’ble jurisdictional High Court in CIT Vs Smt. Kaushalya (1995 (1) TMI 25 - BOMBAY High Court) while dealing with the similar ground about the limb of charge, whether mere mistake in language used or mere not striking off of inaccurate portion cannot by itself invalidate notice issued under section 274 of the Act. The language of the section does not speak about the issuance of notice. All that is required is that the assessee be given an opportunity of show cause. The issuance of notice is an administrative device for informing the assessee about the proposal of levy of penalty in order to enable him to explain why it should not be levied against him. If it is taken for the sake of argument that mere mistake in the language in the notice for non-striking off of ‘inaccurate particular’ or marking on ‘concealment of income’ portion cannot by itself invalidate the notice. Entire facts and backgrounds thereof are to be kept in mind. Every concealment of fact may ultimately result in filing of or furnishing inaccurate particular. It was further argued that no statutory notice has been prescribed in this behalf in the Income tax Act.
The judgment of Hon’ble Jurisdictional High Court in CIT Vs Kaushalya (supra) is still having a binding force on us. Thus, with utmost regards to the judgment of Karnataka High Court in CIT Vs Manjunatha Cotton & Ginning Factory (2013 (7) TMI 620 - KARNATAKA HIGH COURT ) we are bound to follow the judgment of jurisdictional High Court in CIT Vs Kaushalya (supra). - Decided against assessee.
Penalty u/s 273 - assessee contended that no section was mentioned in the penalty order, therefore, the penalty has to be deleted - Held that:- On perusal of the notice issued u/s 273 r.w.s 274, (page-35 of the paper book), it was fairly agreed by the ld. counsel for the assessee that section 273(2)(b) of the Act has been mentioned in the aforesaid notice. Since, we have deliberated upon the facts/case laws in detail, while deliberating/adjudicating the appeals of the assessee u/s 271(1)(c) of the Act in earlier paras of this order, therefore, considering the elaborate discussion made therein and the factual matrix available on record, on identical reasoning, we find that the assessee neither paid the advance tax nor filed the estimate of advance tax payable in terms of section 209A of the Act, the assessee failed to fulfill the statutory obligation. The original return was accepted u/s 143(1) of the Act and as a result, effectively, the subsequent assessment is the only assessment in the case of the assessee. Even bona-fide belief is not borne out of facts. Considering the totality of facts, we find no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal), thus, these appeals are also dismissed.
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2017 (3) TMI 1580 - ITAT, DELHI
Validity of assessment - addition on account of disallowance of 100% expenditure and on account of unexplained purchase u/s. 69C - Held that:- In the present case, it is noticed that the assessments framed by the Assessing Officer for the assessment years 2003-04 to 2008-09 were held to be nullity [2014 (4) TMI 554 - ITAT DELHI] as held Assessment upon a dissolved company is impermissible as there is no provision in the I.T. Act to make an assessment upon a non-existent company. On amalgamation, the company seizes to exists in the eyes of the law - Thus, assessment upon a dissolved company is impressible - Decided against revenue
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2017 (3) TMI 1577 - ITAT MUMBAI
Charging of interest u/s 234A, 234B and 234C as calculated after taking in account of TDS deductible at source - Held that:- Respectfully following the decision of the Co-ordinate Bench of the Tribunal in assessee’s own case, we restore the issue to the file of the AO with a direction to recompute the interest u/s 234A, 234B and 234C after taking into account the tax deductible on total income of the assessee by affording fair and reasonable opportunity of being heard to the assessee.
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2017 (3) TMI 1576 - ITAT, PUNE
Levying of penalty u/s 271(1)(c) - defective notice - Held that:- In the notice dt.31.12.2009 issued u/s 274 of the Act, AO has not struck off the inapplicable portion i.e., as to whether it was the case of concealment of particulars of income or furnishing of inaccurate particulars of income. We further find that in the penalty order passed u/s 271(1)(c), AO has recorded the satisfaction by stating that assessee has furnished inaccurate particulars of income and that Ld. CIT(A) while confirming the penalty order has concluded that it was a case of concealment as well as furnishing of inaccurate particulars of income. Thus from the perusal of notice issued u/s 274 r.w.s 271(1)(c) it is seen that AO is not clear as to under what charge penalty has to be levied u/s 271(1)(c) of the Act as the notice is vague as it fails to clearly spell out the charge of levy of penalty. - Decided in favour of assessee.
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2017 (3) TMI 1575 - ITAT MUMBAI
TPA - computation of PLI - excluding losses in Solar Trial in computing PLI of manufacturing segment and not identifying separate segment in respect of Solar Test - Held that:- There is no need to interfere with the order of the DRP with regard to computation of PLI. It had rightly held that ST activity was an extraordinary item and was not part of the regular business of the assessee and that there was impairment of assets. Therefore, upholding the order of the DRP, we dismiss both the grounds.
Claim for set off of brought forward unabsorbed depreciation - Held that:- Where there is current depreciation for such succeeding year the unabsorbed depreciation is added to the current depreciation for such succeeding year and is deemed as part thereof. If, however, there is no current depreciation for such succeeding year, the unabsorbed depreciation becomes the depreciation allowance for such succeeding year. We are of the considered opinion that any unabsorbed depreciation available to an assessee on the 1st day of April, 2002 (the assessment year 2002-03), will be dealt with in accordance with the provisions of section 32(2) as amended by the Finance Act, 2001. And once Circular No. 14 of 2001 clarified that the restriction of eight years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from the assessment year 1997-98 up to the assessment year 2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by the Finance Act, 2001, and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever. See General Motors India Private Ltd. case [2012 (8) TMI 714 - GUJARAT HIGH COURT ] - Decided in favour of assessee.
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2017 (3) TMI 1572 - ITAT JAIPUR
Constitutional validity of section 234E challenged - Fee for default in furnishing TDS return/statements - as per assessee “fee” is known in the commercial and legal world to be a recompense of some service or some special service performed, and it cannot be collected for any dis-service or default - Held that:- Due to late submission of TDS statements means the Department is burdened with extra work which is otherwise not required if the TDS statements were furnished within the prescribed time. This fee is for the payment of the additional burden forced upon the Department. A person deducting the tax (the deductor), is allowed to file his TDS statement beyond the prescribed time provided he pays the fee as prescribed under section 234E of the Act. In other words, the late filing of the TDS return/statements is regularized upon payment of the fee as set out in section 234E. This is nothing but a privilege and a special service to the deductor allowing him to file the TDS return/statements beyond the time prescribed by the Act and/or the Rules. We therefore cannot agree with the argument of the petitioners that the fee that is sought to be collected under section 234E of the Act is really nothing but a collection in the guise of a tax. See Rashmikant Kundalia Vs. Union of India [2015 (2) TMI 412 - BOMBAY HIGH COURT] - Decided against assessee.
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2017 (3) TMI 1570 - ITAT MUMBAI
Reopening of assessment proceedings u/s 147/148 - Held that:- We find that there was admission by Shri Mukesh Chokshi that he was engaged in providing bogus long term gains claim in lieu of cash and he was duly examined by the assessee. Totality of facts clearly indicates that there was reasonable belief with the Assessing Officer that income has escaped assessment, therefore, so far as, reopening is concerned, we find no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal), thus, this ground is decided against the assessee.
Bogus accommodation entries - Held that:- On the basis of the orders of ITAT in case of Shri Mukesh Chokshi and his associates, it is a concluded fact that Shxi Mukesh Chokshi is not doing any business of share transactions or stock brokering but he has provided only accommodation entries of share transactions and thus facilitated in helping the appellant for showing bogus, tax free, Long Term Capital Gain. For accommodation entries provided by Shri Mukesh Chokshi and his associates, his net income @0.15% of total transactions has been shown as income and has been accepted by the ITAT.
Therefore, all these transactions are bogus and also the Long Term Capital Gain shown in the return is bogus. Accordingly, the addition made by the AO is upheld and grounds of appeal No. 1, 3 & 4 are dismissed. Addition made under section 68 of the Act as well as the consequential addition representing commission paid to the parties who facilitated the transactions, is upheld. - Decided against assessee.
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2017 (3) TMI 1567 - ITAT MUMBAI
Penalty u/s 271(1)(c) - Commissioner's power u/s 263 to direct the Assessing Officer to initiate penalty proceedings u/s 271(1)(c) - CIT-A passed order u/s 263 holding that the omission on the part of the Assessing Officer to initiate penalty proceedings during the course of assessment has rendered the assessment order erroneous and prejudicial to the interest of the revenue - Held that:- There are divergent views of the High Courts on the subject. Therefore, following the order of the Hon’ble Supreme Court in the case of CIT Vs. Vegetable Products [1973 (1) TMI 1 - SUPREME Court] when two views are possible, the view in favour of the Assessee is to be followed. Therefore CIT v. Paramanand M Patel [2005 (7) TMI 72 - GUJARAT High Court] and in the case of CIT v. Subhash Kumar Jain [2010 (9) TMI 772 - Punjab and Haryana High Court] we set aside the order of the Commissioner passed u/s 263 in directing the Assessing Officer to initiate penalty proceedings u/s 271(1)(c) of the Act.
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2017 (3) TMI 1566 - ITAT AHMEDABAD
Addition of unexplained share application money - Held that:- Mere production of PAN details is not sufficient to establish identity of a person. Hon’ble apex court affirms the same in its reported order 2015 (9) TMI 54 - SUPREME COURT OF INDIA. We proceed further to notice that hon’ble Delhi high court in Onassis Axles Private Limited Versus Commissioner of Income Tax [2014 (2) TMI 751 - DELHI HIGH COURT]upholds this tribunal’s order restoring Assessing Officer’s finding making Section 68 addition of share application money after taking note of the fact that the concerned share applicants belonging to different places had got prepared their pay orders on the same way falling on 29.06.2006.
We take into account all this case law to conclude that the same is very much applicable in facts involved in the instant appeals wherein the assessee has not been able to prove even identity of its share applicants. We also wish to observe that its reliance being placed on demand draft applications is further devoid of merit since the concerned bank had not complied with “ KYC” requirements before issuing demand drafts in question. We accordingly restore Assessing Officer’s findings as narrated in preceding paragraphs to reverse CIT(A)’s conclusion forming subject matter of our instant adjudication pertaining to both assessment years raising sole substantive issue of validity of Section 68 addition in question. The Revenue’s sole substantive ground as identically pleaded in the instant appeals succeeds.
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2017 (3) TMI 1565 - ITAT KOLKATA
Disallowance u/s 14A - Held that:- It is not in dispute that Rule 8D of the Rules cannot be applied for Asst. years prior to Asst. Year 2008-09. We find that the ld CIT(A) had directed the ld AO to disallow 1% of exempted income u/s 14A of the Act which was agreed upon by the ld DR before us. Hence the ground taken by the revenue before us does not survive. We find that the assessee though did not offer any disallowance suo moto in the return of income u/s 14A of the Act, came forward with petty disallowance of ₹ 2,48,600/- during the course of assessment proceedings which was further improved to ₹ 60,39,896/- based on some rational workings. Admittedly the said workings have not been examined by the lower authorities. Hence in the interest of justice and fair play, we direct the ld AO to examine the workings given by the assessee before the ld CIT(A) and decide the issue afresh in accordance with law.
Commission to non-whole time Directors disallowed under section 40(a)(ia)- Held that:- Respectfully following the view taken by jurisdictional Tribunal in the case of Jahangir Biri Factory Pvt. Ltd. (2009 (3) TMI 215 - ITAT CALCUTTA-C ), we allow the claim of assessee. We also find that the subject mentioned payments have been brought within the ambit of section 194J of the Act only with effect from 1.7.2012 and hence the same cannot be made applicable for earlier years.
Relinquishment of a right to operate the Hotel Searock - whether could be construed as relinquishment of a capital asset so as to fall within the ambit of ‘capital gain’ or 'business income' - Held that:- We hold that ‘right to operate’ the Hotel under Operating Licence Agreement dated 3.5.1986 wherein the assessee has been given unfettered powers to operate the Hotel in any manner in which it finds suitable. This right , in our considered opinion, is a capital asset within the meaning of section 2(14) of the Act. Hence relinquishment of such right would only result in transfer u/s 2(47) of the Act and hence the resultant gain thereon would only fall under the ambit of ‘capital gain’. Since the assessee has been using the said right from 1986 onwards, the resultant gain would only be Long Term Capital Gain. Moreover, the assessee had entered into a Settlement Agreement dated 11.5.2005 in order to give quietus to various disputes among the assessee and ELEL with the assistance of an Arbitrator and the said Arbitrator had duly passed an Award wherein the assessee was made to relinquish its right to operate the hotel by receiving a consideration of ₹ 32.42 crores and both the parties unconditionally withdrawing their respective cases filed before the Hon’ble Bombay High Court. Hence we hold that that the consideration received by the assessee pursuant to this Settlement Agreement in the sum of ₹ 32.42 crores for relinquishing its capital asset (i.e. right to operate the hotel) is to be taxed only as Long Term Capital Gain.
Deduction u/s 80IA of the Act in respect of two captive power undertakings at Bhadrachalam factory, Andhra Pradesh - Held that:- We find that whether the deduction u/s 80IA of the Act is eligible to an assessee engaged in generation of power which has been consumed in its entirety by the other business units of the assessee is settled by the decision of the Hon’ble Calcutta High Court in assessee’s own case in favour of the assessee by laying emphasis on the word ‘generation of power’ which is contemplated in provisions of section 80IA of the Act. Hence this aspect of the issue is decided in favour of the assessee. With regard to the market value issue, we find that the Hon’ble High Court had set aside. Respectfully following the same, we deem it fit and proper to set aside this aspect of the issue (i.e. determination of market value alone) to the file of the ld AO to decide the same in the light of directions of the Hon’ble Calcutta High Court in assessee’s own case. Accordingly, the Ground raised by the revenue is partly allowed for statistical purposes.
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2017 (3) TMI 1563 - ITAT HYDERABAD
Disallowance made u/s 14A - disallowed expenditure incurred in relation to exempt income which does not form part of total income - Held that:- There is no disallowance u/s 14A r.w.s 8D, if the assesse has not received any exempt income which does not form part of the total income under this Act. The CIT (A) after considering the relevant facts has rightly deleted additions made by the A.O. See Prathista Industries Ltd., Vs. DCIT [2016 (4) TMI 1207 - ITAT HYDERABAD]. Appeal filed by the Revenue is dismissed.
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2017 (3) TMI 1562 - BOMBAY HIGH COURT
Disallowance of inland transportation charges and commission expenses - not covered under Explanation to Section 37(1) - business expediency - Tribunal allowed claim - Held that:- It is an agreed position between the parties that the impugned order of the Tribunal allowed the respondent assessee's appeal before it by placing reliance upon Ajanta Pharma Ltd case and it is also an agreed position that the appeals were filed by the Revenue in the case of Ajanta Pharma Ltd. (2017 (8) TMI 857 - BOMBAY HIGH COURT). Mr. Hadade, learned Counsel appearing for the respondent assessee states that the above income tax appeals in the case of Ajanta Pharma Ltd. (supra) are awaiting consideration for admission before the bench presided over by Hon'ble Shri. Justice S.C. Dharmadhikari. In the above view, it would be appropriate that these appeals on one of the questions which follows the decision of its coordinate bench in Ajanta Pharma Ltd. (supra) be heard along with that matter.
Revenue however submits that according to the Revenue decision of Ajanta Pharma Ltd. (supra) of the Tribunal would not apply to the present facts. In the above view, the present appeals are adjourned at the request of Counsel for a period of 4 weeks for admission.
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2017 (3) TMI 1560 - ITAT RAJKOT
Accrual of income - non disclosure of interest income of non performing assets on accrual basis - Held that:- This issue is no more resintegra. Assessee has relied on the decision of Hon'ble Gujarat High Court in the case of Principal CIT Vs Mahila Seva Sarkari Bank Limited [2016 (8) TMI 377 - GUJARAT HIGH COURT] wherein held that assessee was correct in not charging interest on NPA. The Hon'ble Gujarat High Court agreed with the view taken by the Hon'ble Delhi High Court in the CIT Vs. Vasisth Chay Vyapar Ltd. [2010 (11) TMI 88 - Delhi High Court] wherein it was held that interest income could not be said to have accrued to the assessee having regard to provisions of section 45Q of the RBI and prudential Norms issued by the RBI in exercise of its statutory powers.
Respectfully, following the above assessee’s claim of not including the interest on NPA in the profit and loss account is allowed. - Decided in favour of assessee.
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2017 (3) TMI 1551 - DELHI HIGH COURT
Expenditure allowable as deduction as per the explanation to section 37(1) - interest paid to M/s IFCI Ltd. - Held that:- No substantial question of law arises on these two issues. The amount of ₹ 15,25,685/- could not in the circumstances have attracted the mischief under the explanation to Section 37 (1) as it was the interest paid for late repayment of advance to M/s IFCI Ltd, even as far as the amount written off, i.e., ₹ 70,44,023/- is concerned. The Court notes that the sole rationale for disallowance by the AO was that the assessee had stopped its business. The assessee had claimed the said amount as the value of old stock written off.
Admit the appeal so far as the following question of law is concerned: -
“Whether the ITAT erred in deleting the addition of ₹ 22,90,00,000/- made by the Assessing Officer on account of amount transferred to capital reserve ignoring the fact that the said amount was a revenue receipt in the hands of the assessee and therefore the provision of Section 41 (1) of the Act was applicable?”
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2017 (3) TMI 1549 - ALLAHABAD HIGH COURT
Accrual of income - foreign currency translation - Held that:- There is a finding of fact recorded by Tribunal after noticing that Assessing Officer computed the foreign currency translation difference as income as per accounting principle and only on notional basis. The difference was adjusted in the accounts of foreign currency translation difference. The amount of this difference was notional debit/credit and did not represent any loss or income for the purpose of computing the taxable income under the Income-Tax Act. The entries on this account were made only for balancing the books. Therefore, this exercise was merely done on account of incorporating the trial balance appearing in the Iraqi branch in the Head Officer books in Indian currency. Since no actual gain accrued to the assessee, there was no question of taxing this amount. - Decided against revenue.
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2017 (3) TMI 1548 - ITAT MUMBAI
Disallowance u/s.14A - whether the expenditure eligible to stock in trade can be disallowed invoking the provisions of section 14 A r.w.r.8D? - Held that:- We find that in the cases relied upon by the AR, it has been clearly held that no disallowance u/s.14A r.w.r 8D of the Rules, can be made for the securities held as stock in trade. The reason behind it is not difficult to understand. Income arising from the business of an assessee is taxed under the head business and profession. So, all the expenses have to be considered while computing the business income. On the other hand, if the securities are held as investment and an assessee earns exempt income, same can be subjected to disallowance as envisaged by the provisions of section 14A.
In the case under consideration the assessee is dealing in shares and F &O segments and offering its income under the head business income. Therefore, in our opinion, the FAA was not justified in confirming the disallowance made for expenses incurred with regard to stock in trade. Reversing his order, we decide the effective ground of appeal in favour of the assessee.
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2017 (3) TMI 1546 - ITAT CHANDIGARH
Addition on account of fall in GP - proof of defects in books of accounts - Held that:- There is only small decrease in the gross profit rate as compared to the earlier year. The assessee has maintained regular books of account supported by purchase and sale bills and vouchers of expenses. No specific defects have been pointed out in maintenance of the books of account and vouchers. All the quantitative details were supplied to the Assessing Officer. Books are audited. Net gross profit has increased as against earlier year.
Assessee had already surrendered additional income during the course of search which was towards the discrepancy found during the course of search and for fall in GP which were more than sufficient to meet the above addition. Since no specific defects have been pointed out in the maintenance of the books of account, therefore, Assessing Officer was not justified in enhancing the profit rate of the assessee for the purpose of making the addition. - Decided against revenue
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