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2020 (6) TMI 529 - AT - Income TaxRejection of books of account u/s 145(3) - GP estimation - CIT(A) estimated the income @ 11% by considering the original financial statements and percentage of GP declared by the assessee - HELD THAT:- Assessee is a milk supplier and earns only commission income based on the sales achieved by the assessee. As far as business models are concerned, there is no change from earlier assessment year to this assessment year and we notice that assessee has declared 5.93% of GP in AY 2011-12 and 6.3% in AY 2012-13. Assessee can be assessed to tax only on real income and not on any estimation or surmises. Therefore, we are of the view that assessee has declared 11.08% as GP without substantiating the result declared by it, the reasons best known to him. Assessee should be charged to tax @ 7% (considering the gross profit declared by the assessee in AY 2011-12 and 2012-13, where there is 6% increase in GP and we expect that assessee must have increased its GP by 10%.) Accordingly, we direct the AO to estimate the income @ 7%. Therefore, the ground raised by the assessee is partly allowed.
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