9911796707
TMI Blog2018 (8) TMI 2089X X X X Extracts X X X X X X X X Extracts X X X X ..... ading the CIT(A) has erred in directing the Assessing Officer to restrict the addition of Rs.7,84,28,827/- to Rs.13,60,158/- thereby estimating the tax payer's profit @ 12% and in further concluding that section 40(a)(ia) of the Act does not apply in the given facts of the case; respectively. Learned Representatives take us to the CIT(A)'s detailed common discussion qua these three issues reading as under :- " 6- Ground no. (ii) to (iv) relate to the contention of the appellant against disallowance of Rs.7,82,12,027/- which was claimed on account of transport expenses. The fact of the case is that the AO observed that the appellant made partial compliance and did not produce books of account during the assessment proceedings, he found th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness. They further submitted that as the bills, vouchers and details of the transport expenses were not produced and the AO had held the expenditure to be bogus then the question of disallowance u/s 40(a)(ia) of the Act could not apply. The appellant also submitted that under the Income Tax Act only real income could be assessed and hence the income from transport business if held genuine then the real income should be estimated and if the transport business was held to be bogus then the income and expenditure be excluded. After going through the facts and circumstances of the case, :submission of the appellant and perusal of the assessment order, I find that the appellant had disclosed a net income of Rs.91,42,387/- (Rs. 87571214- Rs 78428 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view that when books of account are not found to reliable and all the expenses were found to be non genuine then disallowance u/s.40(a)(ia) is not called for. In that situation it would be proper to reject books of account and estimate the profit as provided u/s.l44 of the I.T. Act. In this case, since, the entire transport business was claimed to have been carried out through hired trucks and not through own trucks, therefore, it would be reasonable in the interest of natural-justice that the profit is estimated at 12% as against the addition made by the AO of the entire turnover, thereby, the AO is directed to make addition of Rs.13,60,158/- (Rs.1,05,08,545 - Rs.91,42,387) and the balance addition is directed to be deleted. This ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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