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2017 (3) TMI 1472 - AT - Income TaxAddition applying net profit rate of 8% after invoking the provisions of Section 145(3) - Held that:- As find from the copy of the order of Sales Tax Authority dated 04.11.2010, wherein the assessee has shown gross sales in computation sheet at ₹ 6,03,44,734/-, which also shows that there is a variation in the sales shown by the assessee in profit and loss account and as per sales registers as well as sales to the Sales Tax Authorities. Further, the Sales Tax Authorities has also pointed out the variation of sales amounting to ₹ 4,72,299/- in their assessment order dated 04.11.2010. In the light of these facts and circumstances of the case, we are of the considered opinion that the AO was correct in invoking the provisions of Section 145(3) of the Act, as in absence of non-production of original documents, audit report, sales and purchase bills, vouchers of expenses and FIR, profit from the books of accounts cannot be deduced properly. Therefore, we are of the view that the AO was justified in invoking the provisions of section 145(3) of the Act. Considering the claim of the assessee, the deduction/ set-off on account of DEPB income of ₹ 18,70,576/- would also be available to the assessee as set-off as the assessee has already shown this income in profit and loss account. Therefore, net income is worked out at ₹ 14,80,589/- (33,51,165-18,70,576) as against the income computed at ₹ 44,68,220/-by the AO as per the assessment order and ₹ 6,25,650/- disclosed in return of income by the assessee under regular provision of Act. As regards, the deletion of ₹ 18,70,576/- on account of addition of DEPB income by the AO, we are of the view that the ld. CIT(A) has wrongly deleted the same while deleting total addition of ₹ 44,68,220/- made on application of net profit as the said income is shown by the assessee in its profit and loss account. However, the set off of the same is available to the assessee as given above by us from the estimated income as computed above by taking the gross profit at 6% estimate of gross profit rate. Therefore, we make it clear that the net taxable income after this order would be at ₹ 14,80,589/- as against returned income of ₹ 6,25,650/- as shown by the assessee. Appeal of the Revenue is partly allowed.
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