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of <h1>Tribunal upholds rejection of books and 5% profit rate due to lack of evidence</h1> <h3>Sh. Harinder Sharma Versus ITO, Ward 38 (3), New Delhi</h3> Sh. Harinder Sharma Versus ITO, Ward 38 (3), New Delhi - TMI Issues:- Addition of income- Rejection of books of accounts- Estimation of profitAnalysis:- The appeal was filed against the order of the Ld. CIT(A) confirming the addition of income and the rejection of books of accounts. The assessee declared income of Rs. 5,30,030 and was engaged in the business of fabrication of garments. The AO rejected the books of accounts due to non-production of required details and applied a net profit rate of 5%, resulting in an addition of Rs. 11,78,847.- The assessee contended that all expenses were entered into audited books, and the NP rate applied was unjustified. However, the Ld. CIT(A) upheld the rejection of books and estimation of NP rate at 5% as expenses were found inflated and unsupported by bills and vouchers. The appeal was dismissed.- The Tribunal found no justification to interfere with the lower authorities' orders. The assessee failed to produce books of accounts and supporting documents, both before the AO and the Tribunal. The claim of expenses on repair and maintenance was not substantiated, and discrepancies were found in salary expenses documentation. The addition to income was deemed reasonable, and the appeal was dismissed.This detailed analysis covers the issues of addition of income, rejection of books of accounts, and estimation of profit, providing a comprehensive overview of the judgment delivered by the Appellate Tribunal ITAT Delhi.
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