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2018 (8) TMI 1419 - AT - Income TaxUndisclosed commission income - assessee is a firm and is a distributor of recharge vouchers, SIM Card of Bharti Airtel Limited. - validity of additions without rejecting the books of account - Held that:- A perusal of the papers on record as well as the assessment orders, demonstrate that figure of purchase recorded in the books of account, as well as audited statements do not reflect the correct expenditure incurred by the assessee for purchases. The income receivable by the assessee from Bharti Airtel Ltd., which is paid in kind, is included in the cost purchases. Contra entries eliminating the commission from the cost of purchases have not been passed. Thus in my view the Assessing Officer as well as the Ld. CIT(A) were right not accepting the purchase figure disclosed by the assessee as correct. When certain addition on account of inflation of purchases has been made, there is no legal requirement of rejection of books of account. Though we agree with the findings of the Ld. A.O. has confirmed by the Ld. CIT(A), we are of the considered opinion that the valuation of closing stock has to be re-done by the Assessing Officer, by excluding the commission part from the total purchases. Coming to the issue of commission, the assessee has not demonstrated with the evidence its claim that the amount in question is not commission but reimbursement of expenditure incurred on behalf of the Bharti Airtel Ltd. Hence this ground of the assessee is dismissed. Decided partly in favor of assessee.
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