TaxTMI 
TaxTMI 
2016 (6) TMI 736
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....ve net profit rate at 5.05% only as against 10.2% applied by the AO even while upholding the applicability of Section 145(3) of the I.T. Act, 1961. (ii) The ld. CIT(A)'s order is perverse as specific defects, in case of debited expenses have been ignored, in preference to arbitrarily adopted net profit rate of 5.05 only. (iii) The order of the ld. CIT(A) is perverse in deleting the disallowance of Rs. 58,87,032/- made by the AO u/s 41(1) in spite of the fact that the assessee had neither filed confirmations nor were these persons produced for examination. 2.1 Apropos Ground No. 1 and 2 of the Revenue wherein brief facts of the case are that the return of income for the assessment year 2009-10 was e-filed by the assessee....
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....the assessee produced the identity proof and confirmation of one of the accountant while stating that the other one left the job. No proof regarding this was produced. (v) Out of total claimed royalty expenses of Rs. 9,97,692/- , the assessee firm could produce documents related only to royalty expenses of Rs. 9,51,239/-. The rest of the amount of Rs. 46,453/- remained unsubstantiated (vi) Office expenses of Rs. 41,270/- were not supported by proper bills and vouchers. (vii) Out of miscellaneous expenses of Rs. 45,040/-, the assessee was able to produce bills and vouchers for only Rs. 7,408/-. For the rest of the amount of expenses, no bills were produced. (viii) The payments of Rs. 2,35,25,400/- made to ....
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....creased accordingly to 10.2% and hence an addition of Rs. 34,33,013/- has been made by the AO to the income of the assessee firm. 2.3 Aggrieved, the assessee carried the matter before the ld. CIT(A) who partly allowed the ground of assessee basing net profit rate of 5.05% by observing as under:- ''Conclusion:-In view of the aforesaid factual and legal position, it is held that the ratio upheld in the above decisions, in respect of estimation of income u/s 145(3), is also applicable in the present case, thus the past history of the appellant is to be applied to compute the trading income of the appellant of the current year. AO observed from the relevant past history, it is found that the appellant had admitted of having effectiv....
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.... the ld. CIT(A) has effectively taken the net profit rate at 5.05% which is based on the previous history of the assessee. The ld. DR was not able to controvert the fact recorded by the ld. CIT(A) in his order. Therefore, we find no merit in this ground of appeal of the Revenue which is dismissed. Thus Ground Nos. 1 and 2 of the Revenue are dismissed. 3.1 Apropos Ground No. 3 of the Revenue wherein brief facts of the case are that the AO vide questionnaire annexed to Notice u/s 142(1) dated 15-11-2011 asked the assessee firm to provide confirmation of accounts of all the sundry creditors above Rs. 1,00,000/-. The assessee filed the confirmations in respect of only three parties viz Rakesh Earthmovers (P) Ltd. , Vijay Enterprises and Raja....
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....ste and cryptic manner, without following the requisite procedure/preconditions, as stipulated by the various Courts, as discussed above. From the record, it is also evident that such liabilities were not old in nature and mostly related to the current year itself or immediate preceding year only. Moreover, the relevant accounts are also found active in nature, showing several transactions entered into in the current year and subsequent year also. In other words, in my considered word, the AO has invoked the provision of Section 41(1), merely on the suspicion and conjecture, without bringing any supporting material in this regard. Accordingly, it is held that addition of Rs. 58,87,032, made in this regard, is found untenable and unjustified....