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2017 (6) TMI 1040 - AT - Income TaxDetermination of Net profit rate of 8% on gross contract receipt - Held that:- AO has neither pointed out any specific deficiency, in the purchase invoices or the expense invoices, nor discussed any comparable case on identical facts, to form the basis for application of a particular net profit rate on gross total receipts, in the case of the assessee. On perusal of the comparative ‘Net Profit Chart’ of the assesses’s past history on profit rate, as above, it is evident that the Net Profit Rate before interest paid to partners capital is reasonably declared at 3.54% as against 3.3 % and 3.8% of the previous years. However, after interest paid to partners capital, it is reduced to below 1% as compared to 1.18% and 1.6% from the earlier assessment years as above. The profit rate applied by Authorities below at 8% is too much on the higher side and is unreasonable. Following the order in the case of M/s Om construction Company [2014 (5) TMI 1026 - ITAT AGRA] on identical facts, we find it just, fair and reasonable to estimate the income of the assessee at the Net Profit rate of 4% of the gross total receipts before salary and interest to the partners of the firm, for the year under appeal. - Decided in favour of assessee partly. Addition on account of current liabilities and provisions, being creditors for goods - Held that:- As the books of account of the assessee are rejected by the assessing Authority in which case the same books of account could not be relied on for an addition on account of trade creditors. See CIT vs. Bahubali Neminath Muttin [2017 (1) TMI 820 - KARNATAKA HIGH COURT ] - Decided in favour of assessee.
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