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2015 (6) TMI 490 - AT - Income TaxRevision u/s 263 - CIT has considered the assessment order to be erroneous and prejudicial to the interests of revenue appears to be the rate of profit adopted by AO, which according to ld. CIT, should have been 12.5% on main contract and 8% on sub-contract works as against 10% and 7% respectively by AO - Held that:- When AO is of the opinion that books of account are unreliable, the discretion is with him to reject the books of account and estimate the profit at a rate which is according to AO is reasonable considering the nature of business carried on by assessee. Once such decision is taken by AO, who is the best judge of the situation, then, ld. CIT cannot interfere with such decision of AO to substitute his own opinion on the rate of profit adopted by exercising power u/s 263 of the Act. Moreover, once the books of account are found to be unreliable and rejected resulting in estimation of profit, AO is not required to enquire or examine the individual items of expenditures or other issues as pointed out by ld. CIT since estimation of profit usually takes care of such deficiencies in the books. In the aforesaid circumstances, ld. CIT cannot hold the assessment order to be either erroneous and prejudicial to the interests of revenue so as to revise the same u/s 263 of the Act. Accordingly, we set aside the impugned order of ld. CIT and restore the assessment order. - Decided in favour of assessee.
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