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2013 (6) TMI 566 - ITAT KOLKATAEnhancement of income - disallowance of expenses - Net profit adoption - Held that:- In the absence of supporting material of the books of accounts i.e., bills and vouchers the assessing authority should have rejected books of account and should have framed assessment in terms of section 144 & 145 and for that AO must act honestly and not vindictively or capriciously because he must exercise judgment in the matter but from records it is evident otherwise. Thus a reasonable estimate can be made and the assessee might have made purchases without procuring bills and might have avoided sales tax and other government dues. It means that assessee might have earned a little higher profit than earlier years. As Tribunal has confirmed the application of net profit at 5.35% in earlier year i.e. in AY 2003-04 a reasonable net profit i.e. @ 8% will meet the end of justice. Accordingly direct the AO to re-compute the assessee's income after deleting all the additions as made by AO and enhanced by CIT(A) but restrict the addition only at 8% of gross contract receipts - appeal of assessee allowed partly.
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