2016 (6) TMI 892

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..... ncome of Rs. 8,98,990/-. The assessment was taken for scrutiny by issuing notice under section 143(2) of the Income Tax Act, 1961 (in short 'the Act'). The scrutiny assessment under section 143(3) of the Act was completed on 21.2.2013. The Assessing Officer rejected the books of account of the assessee and applied a net profit rate of 6.5% on the total turnover of the assessee. The turnover of the assessee was Rs. 3,43,21,326/- and accordingly, the Assessing Officer estimated the net profit at Rs. 22,30,886/- as against the net profit declared by the assessee at Rs. 2,78,994/-, resulting in an addition or Rs. 19,51,896/-. 3. Aggrieved by the rejection of books of account and estimating the net profit rate of 6.5% on the turnover, t .....

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..... T(A) through his order dated 29.02.2016 has erred in passing that order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961. 2. That on the facts, circumstances of the case and in law, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein he was not justified in rejecting the books of accounts of the appellant and the provisions of Sec 145(3) have been misapplied. 3. That on the law, facts, circumstances of the case and in law, the Worthy CIT(A) has erred in partly confirming the action of Ld. AO wherein he was not justified in estimating the net profit rate of the appellant at 5% of turnover of the appellant and thereby has erred in making addition of Rs. 17,16,066/-. Since the rejection of bo .....

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..... d. The Assessing Officer has elaborated upon inflation of expenses on account of lack of vouchers, etc. The Assessing Officer had also pointed out that commission payments were about five times more compared to the commission paid in the last year. It was stated by the Assessing Officer, that the commission payments are excessive, when sale turnover was less than the previous year. Considering all these above discrepancies, I am of the view that the Assessing Officer has correctly rejected the books of account of the assessee. 10. As regards the estimation of income, the Assessing Officer has estimated the net profit at 6.5% of the total turnover of the assessee. The CIT (Appeals) had reduced the same to 5% of the total turnover. The CIT ( .....

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