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2018 (2) TMI 1705 - AT - Income TaxBogus purchases - rejection of books of accounts - notice u/s 133(6) - addition equivalent to 25% of the purchases - profit determination - Held that:- Once the AO has rejected the books of accounts by invoking the provisions of section 145(3) the income of the assessee was required to be assessed on the basis of a reasonable and proper estimates. We set aside the matter to the record of the Assessing Officer for determination of the income of the assessee on the basis of the proper and reasonable estimates as well as best judgment by applying GP or NP rate. We may clarified that even after rejection of books of accounts it may not necessarily resulting a trading addition if the GP rate declared by the assessee is found to be more than the Bench Mark to be applied by the AO. Hence, the AO is directed to apply the proper GP rate on the basis of past history of the assessee.
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