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2023 (3) TMI 280 - ITAT AMRITSARValidity of assessment u/s 144 - net profit determination by rejecting the books of account u/s 145(3) - assessee was unable to produce the books of account and detailed documents during the assessment proceeding - arbitrary profit rate of 6% of gross receipts contrary to rate of 2.07% returned by the appellant on the basis of audited financial statements - CIT(A) only restricted the net profit @ 4% for non-submission of the books of account of the assessee - HELD THAT:- We find that for assessment year 2014-15 the net profit percentage declared by the assessee was 3.11. Appellate authority has taken a realistic view & has determined the NP @4% on the gross turnover of the assessee. CIT(A) properly clarified that the assessee was unable to explain the reasons for non-submission of the books of accounts before the assessing authority. Without proper books of account, the ld. appellate authority has determined the net profit @ 4%. After a thoughtful consideration, we find that no infirmity in the order of the ld. CIT(A), so, the grounds of the appeal of assessee for A.Y. 2015-16 are dismissed. Determination of Net profit by the ld. CIT(A) is inclusive of salary &interest paid to partners - CIT(A) has determined lower net profit. We find no infirmity in this issue in the order of the ld. CIT(A). Related to issue in interest on deposit the Counsel took the plea that the fix deposit / FDRs are utilize to acquire the bank guarantee. Entire FDR is related to opportunity generation of business income in several years. The assessee maintained the consistency for utilising this interest earned and interest paid in the P & L account. The issue was already agitated before the ld. CIT(A) by the assessee. We find that there is a nexus in between interest earned and interest paid in relation to the assessee business. Considering the factual matrix, we find that this particular issue is accepted by the bench. The interest paid should be adjusted with interest received which will not separately assessable. Appeal of the assessee dismissed.
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