2010 (4) TMI 111

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....essment year 2004-2005. 2. The assessee firm, which is engaged in the business of travel and tourism, as a tour operator arranging inland tour of foreign tourists visiting India, filed its return declaring taxable income of Rs. 42,53,536/- for the assessment year 2004-2005. The net profit shown in the return was at 7.93% of the receipts. Since the Assessing Officer felt that the net profit reported by the assessee was on lower side, he picked up the expenses relating to seven tours organized by the respondent. On a consideration of the accounts furnished by the assessee, the Assessing Officer felt that the assessee could not demonstrate any pattern as to uniformity of rates etc. and the expenses debited in the tour Ledger did not reconci....

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....ing the Books of Account was that the net profit disclosed by the assessee was on the lower side considering the line of business in which it was engaged, no specific reasons of higher profit having been declared by any similarly situated assessee had not been found by the Assessing Officer. The Tribunal accepted the contention of the assessee that considering the nature of business of the assessee, a formal agreement with the foreign principal was not imperative. As regards reconciliation of the tour expenses with the tour itinerary, it was held that the itinerary was tentative for the purpose of fixing the charges but the same could be changed depending upon various factors, including the number of days of the entire tour, period of stay ....

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....th vouchers and the Books of Account were complete and correct in all respects. The accounts which are regularly maintained in the course of business and are duly audited, free from any qualification by the auditors, should normally be taken as correct unless there are adequate reasons to indicate that they are incorrect or unreliable. The onus is upon the Revenue to show that either the Books of Accounts maintained by the assessee were incorrect or incomplete or method of accounting adopted by him was such that true profits of the assessee cannot be deduced therefrom. 7. The question as to whether the accounts produced by the assessee were defective/incomplete or not is a question of fact. The Commissioner of Income Tax(Appeals) as well....