TaxTMI 
TaxTMI 
TaxTMI 
2010 (6) TMI 781
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....s right in law in assessing the income by applying 3 per cent net profit rate on the gross receipts ? Similarly, this Court vide order dated 17-11-2009 has admitted the Appeal No. 150 of 2009 for the assessment year 2005-06 on the following substantial question of law: (Whether on the facts and circumstances of the case, the learned Tribunal has erred in law in confirming the order of the Commissioner (Appeals) directing to apply 3 per cent net profit rate as against 5 per cent applied by the assessing officer on gross receipts even after holding that the assessing officer rightly rejected the books of account as various expenses such as wages, labour, purchases remained unverifiable ? 3. Both the parties have agreed that the facts, cir....
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....books of accounts had been lost while the accountant was bringing them from Delhi to Lucknow. In addition to above, learned Counsel for the Appellant submits that the account of M/s Mutho Lal Dheeraj Mal, Jhansi had shown that certain payments received during the assessment year 1991-92 to the tune of Rs. 1,19,000 from Assessee but these payments did not find any place in the books of Assessee. He further submits that the Tribunal has erred in law in restricting the net profit rate with the reason that on cross-verification, the assessing officer found that the purchases were either inflated or bogus. These aspects were not considered by the Tribunal. 6. For the assessment year 1990-91, learned Counsel for the Appellant submits that the pu....
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....profit rate was in the range of 1.88 percent to 3 per cent, which was accepted by the assessing officer either under Section 143(1) or 143(3) of the Income Tax Act. The chart furnished by the learned Counsel for the Assessee levelled that for the assessment years under consideration, the net profit rate was assessed by the assessing officer as under: Asst. yr. NP rate 1990-91 10.27% 1991-92 11.96% 2005-06 5% 9. He further submits that in all the appeals, the Tribunal by following its earlier decision has upheld the net profit rate at 3 per cent. He also submits that for all the previous assessment years, the net profit rate was accepted by the Tribunal or assessing officer from 1.88 per cent to 3 per cent. He further submits that t....
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....o reject the books of accounts and estimate the income as the accounts were found defective and Section 145(2) of the Income Tax Act is applicable as per the ratio laid down in the case of CIT v. Thakurmal Bajranglal (1988)173 ITR 66 (Raj) as well as Ramjiwan Lal v. CIT (1980)123 ITR 319 (All). Therefore, we uphold the rejection of the books of accounts by the assessing officer for the assessment years under consideration. Additions to the total income shown by the Assessee are not necessary concomitant to an order passed under Section 145 or 143(2) of the Act. Relevance of accounting under Section 145 even in a best judgment case was pointed in the following passage in CIT v. Gotan Lime Khanij Udhyog (2002)256 ITR 243 (Raj): Therefore, n....
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....g a different basis by the assessing authority. 12. Similar views were expressed in the case of CIT v. Smt, Usha Tripathi (2001)249 ITR 4 (All). For determining the net profit rate and turnover, the past history of the Assessee is important. The fact that the Assessees books have been rejected in earlier years may be circumstances to be taken into account and justify the rejection in a subsequent year where they are maintained on the same pattern as before. But it should not be taken as a precedent that because they were not acted upon in an earlier year, they should be rejected in subsequent years too. However, once books are rejected, the past history of the case becomes, perhaps, the most relevant criterion for estimating the income as ....