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2015 (8) TMI 1208 - AT - Income TaxRejection of books of accounts - net profit assessed at 12 per cent. of the gross receipts and income was accordingly computed - Held that:- The authorities below have given the reasons for rejection of the books of account. The assessee has failed to verify the genuineness of the opening and closing balance of labour payable. The details called for by the Assessing Officer were not furnished. The assessee failed to justify the quantitative and qualitative details of the closing stock. The queries raised by the Assessing Officer were not properly addressed. Therefore, these were the sufficient reasons for rejection of the books of account by the Assessing Officer. The findings given by the Assessing Officer are thus, not rebutted by the assessee to the satisfaction of the authorities below. Even during the course of arguments, assessee could not specify as to what is the illegality in the orders of the authorities below in rejecting the books of account. Therefore, considering the findings of fact recorded by the authorities below for rejection of the books of account, we do not find any justification to interfere with their orders for rejection of the books of account. The cross-objection of the assessee is therefore, liable to be dismissed on this ground. - Decided against assessee. Reasonableness of the profit rate applied by the authorities below - Held that:- AO has applied the profit rate of 12 per cent. for estimating the income of the assessee, however the history of the assessee suggests that the assessee at the maximum has shown net profit rate of 3.17 per cent. Therefore, considering the totality of the facts and circumstances, history of the assessee and objections raised by the Assessing Officer for rejection of the books of account, it would be reasonable and appropriate to apply profit rate of 8 per cent. as against 5 per cent. applied by the learned Commissioner of Income-tax (Appeals) because the Commissioner of Income-tax (Appeals) has failed to note that substantial defects have been pointed out in maintenance of the books of account which could not give the true picture of the profit earned by the assessee. Decided partly in favour of revenue.
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