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2020 (4) TMI 743 - AT - Income TaxRejection of books of accounts - profit estimation - assessment u/s 144 - profit rate determination - HELD THAT:- Assessee has explained the difference in the closing stock figure of the last year and the opening stock figure of the current year filed before the AO and the CIT(A). However, the same was rejected on the ground that the details of the expenditure and date of incurring such expenditure along with the purpose was not given. Books results were rejected u/s 145(3) and the AO has gone for estimation of profit. Considering the fact that there is difference of ₹ 77,08,967/- in the closing stock of preceding year and the opening stock of the current year, we are of the considered opinion that adoption of net profit rate of 3% on ₹ 2,16,78,967/- (i.e., the turnover of ₹ 1,39,70,000/- + ₹ 77,08,967/- being the difference in stocks) will meet the ends of justice - direct the AO to recompute the addition by considering the net profit at ₹ 6,50,369/- less net profit already disclosed by the assessee at ₹ 1,15,812/- (subject to verification). Grounds of appeal No.2 and 3 filed by the assessee are accordingly partly allowed. Addition u/s 68 - assessee could not substantiate the amount received from three different parties on account of share application money - HELD THAT:- Since the ld.CIT(A) has sustained the addition to the tune of ₹ 57 lakhs on the ground that no confirmation was filed by the assessee and considering the fact that there is a running account between the assessee and M/s Rama Ply Board Industries Ltd., therefore, considering the totality of the facts of the case, we deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate the nature of transaction to his satisfaction and decide the issue as per fact and law.
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