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2018 (6) TMI 1103 - ITAT RAJKOTRejection of books of accounts - addition on estimated basis - Held that:- Quantitative details as required by clause 28(b) of Form No. 3CD regarding raw material and finished products (i.e., opening stock of raw material, raw material issued to production department, raw material consumed and closing stock of raw material, opening stock of finished goods, finished goods produced during the year, finished goods sold and closing stock of finished goods) were prepared and audited by certified accountant and were enclosed with Form No. 3CD which had been placed on record, but the Assessing Officer had ignored the factual figures, both in qualitative and quantitative terms, enclosed with the return and filed during the course of assessment proceedings The accounts maintained by the assessee could not have been said to be incomplete or inaccurate. In fact, the Assessing Officer had no material before him to treat the accounts of the assessee as defective or incomplete. AO erred in rejecting the books of accounts under the provisions of Section 145(3) of the Act. Therefore there was no reason for the AO to estimate the profit after rejecting the books of accounts. AO has taken the guidance from the provisions of section 44AD in adopting the rate @ 8% for determining the profit of the assessee which is not correct as it applies to the small assessee having turnover up to ₹ 1 crore - Decided against revenue
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