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2018 (5) TMI 1382 - AT - Income TaxComputation of income - rejection of books of accounts - estimation of NP - Held that:- Department in its circular have emphasized time to time that the Income Tax Authorities should not try to extract the admission of the assessee and should bring some concrete material on record for the purpose of estimating the undisclosed income of the assessee. In these circumstances, particularly when contradictory order has been passed by the A.O. without reference to the books of account of the assessee and other material, we are of the view that the matter should go back to the A.O. for reconsideration of the entire matter. We, accordingly, set aside the orders of the authorities below on the issue of addition of ₹ 4.52 crores and restore to A.O. for fresh determination. Addition on confirmation called for in the case of Graphite India Ltd. -entry reversed in books of accounts - Held that:- Referring to reconciliation statement of Graphite India Ltd., with their ledger account in which it was explained that damaged goods of the amount in question have been reversed in the books of account which is supported by PB-64 which is a bill of the same amount of the goods so returned. Assessee, therefore, explained the discrepancy in the account of M/s. Graphite India Ltd. The addition is, therefore, not justified. We, accordingly, set aside the orders of the authorities below and delete the addition Addition u/s 41 - Held that:- Since the amount payable to the sundry creditors was not credited to the assessee’s P&L A/c. for the year and as the amount was still shown as outstanding at the end of the relevant year, the provisions of section 41(1) could not be attracted. Addition of bogus purchases - Held that:- It is well settled that though admission is a good evidence against the maker, but assessee is entitled to disprove the same through explanation and evidence on record. The above facts clearly show that the amount in question does not pertains to assessment year under appeal. Therefore, no addition could be made in assessment year under appeal. We, accordingly, set aside the orders of the authorities below and delete the addition.
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