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2018 (12) TMI 634 - ITAT VISAKHAPATNAMReopening of assessment - Estimation of income on the suppressed turnover - Held that:- Having assured the department should not resort for reopening of earlier assessments. Though reopening is legal but not ethical and it damages the image of the department in the eye of public. In the instant case as stated in the statement recorded on 05. 03. 2015, the profit and loss account was prepared to boost the turnover figures for the purpose of bank loan. AO instead of taking the net profit adopted the turnover figures and estimated the gross profit on the difference of the turnover. The details of turnover found during the course of survey the contents of the statements recorded were not made available at the time of appeal hearing. For a query from the Bench, DR replied that there is no material available with regard to the details found at the time of survey. In the absence of any information from the revenue, we have no option except to believe that profit and loss account was found which was prepared for bank loan and net profit required to be brought to tax, but not the gross profit. Having admitted the additional income of ₹ 11,04,500/- for an aggregate turnover of ₹ 3. 84 crores on the suppressed turnover at 3. 23% which the AO has accepted, we find no reason to tax the gross profit once again. At the cost of repetition we observe that the AO failed to establish that the turnover found was pertaining to the assessee and did not bring any material to support the contention, Therefore we hold that estimation of income on the suppressed turnover as per the net profit at 3. 23% is reasonable and meets the ends of justice. The estimation of profit at 3. 23% each year is in addition to the income already admitted by the assessee for the A. Y. 2011-12. Accordingly, we direct the AO to compute the income estimating the net profit @3. 23% on the difference of turnover each year independently - decided partly in favour of assessee.
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