TaxTMI 
TaxTMI 
2012 (11) TMI 758
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....s and in law in deleting the addition of Rs.21,84,024/- on estimated GP at 40% because the GP is more or less around 40% in this line of business. 2. The CIT (A) erred by saying that the GP adopted by the AO is absolute arbitrary. In the case of Hyderabad House, the GP is taken over 40% which has been admitted by the assessee himself. In the case of New Astoria Restaurant, though the turnover is less, the assessee had adopted a reasonable GP at 35.80%. In the instant case, the GP adopted is 40% on a turnover over Rs. 2 crores, which is very low when compared with the other cases mentioned above with similar line of business." 3. Briefly the facts are the assessee is engaged in the business of running a restaurant. The assessee filed i....
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.... of the additions made to its total income, filed an appeal before the CIT (A). 4. Before the CIT (A), the assessee contended that for the immediately preceding assessment year 2006-07, identical issue was decided by the CIT (A) wherein the CIT (A) held that the estimation of profit at 40% is not sustainable and accepted the profit declared by the assessee at 31% of the total turnover. The CIT (A) following his earlier order passed in the assessment year 2006-07 allowed the appeal of the assessee by holding that estimation of gross profit at the rate of 40% on total sales is not sustainable. 5. We have heard rival submissions and perused the material on record. It is seen that for the assessment year 2006-07, the revenue challenged th....
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..... In view of the above, the appeal of the Revenue is allowed in part. 7 In Cross Objection, the assessee has challenged disallowance of expenditure of Rs.1,05,722/- paid by the assessee to M/s Khan & Sons towards advertising charges by applying the provisions of section 40(a)(ia) of the Act. The AO while completing the assessment, disallowed he aforesaid claim of expenditure on the ground that the assessee has not deducted tax at source while making payment of Rs.1,05,722/-. It is seen from the assessment order that the AO has admitted the fact that the amount of Rs.1,05,722/- was paid and not payable on the date of balancesheet. We therefore following the order of the ITAT, Special Bench in the case of Merlyn Shipping & Transports, Visa....
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....y supported by proper bills and vouchers. The books of accounts of the assessee cannot be treated as correct and complete and are not reliable to arrive at a correct income. Therefore, he rejected the books of accounts by applying the provisions of section 145(3). The AO found that the gross profit declared by the assessee on the admitted sales comes to 31.15%. The AO completed the assessment by estimating the gross profit at the rate of 40% on the sales admitted by the assessee and added the differential income of Rs.21,84,024/-. The AO further disallowed an amount of Rs.1,05,722/- u/s 40(a)(ia) of the Act. The assessee being aggrieved of the additions made to his total income, filed an appeal before the CIT (A). xx. Before the CIT (....