TaxTMI 
TaxTMI 
2026 (7) TMI 500
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....he Tribunal raising the following grounds of appeal: "1. That the Ld. CIT(A), NFAC, erred in law and on facts in upholding the assessment order where the Assessing Officer wrongly recorded that the assessee had not filed the return of income u/s 139(1) for A.Y. 2017-18 and had only filed return in response to notice u/s 148, whereas the assessee had duly filed her return of income on 26.12.2017 electronically, and no notice u/s 148 was ever issued. Such incorrect factual observation vitiates the entire assessment order. 2. That the Ld. CIT(A) grossly erred in upholding rejection of books of accounts u/s 145(3) when no specific defect, discrepancy or inconsistency was pointed out in the regularly maintained, audited books o....
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....me of the assessee at Rs.1,35,05,679/-. While framing the assessment, the Ld. AO made an addition of Rs.40,35,000/- u/s 69A r.w.s. 115BBE of the Act treating cash deposited in Specified Bank Notes (SBNs) during the demonetization period as unexplained money. Further, the Ld. AO rejected the books of account u/s 145(3) of the Act and estimated business income on a presumptive basis at Rs.94,70,679/-, being 8% of the deemed turnover of Rs.11,83,83,492/-, which was computed after excluding the unexplained cash deposits from the gross turnover. However, the sundry creditors of Rs.3,59,41,333/-, for which confirmations were required but no confirmations were filed, and the amount debited in the profit and loss account of Rs.4,28,06,558/- both we....
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....t the assessment is being made u/s 144 r.w.s. 147 of the Act, whereas no notice u/s 148 of the Act was ever issued by the Ld. AO. Our attention was drawn to page 12 of the order of the Ld. CIT(A) in respect of Ground No. 2, and it was submitted that this plea was ignored by the Ld. CIT(A) and it was treated as a typographical error. It was submitted that the net profit rate of 5% upheld by the Ld. CIT(A) is very high as the assessee had submitted the books of account, audit report, VAT returns, financial statements, comparative chart of turnover, GP, NP, before the Ld. AO. The Ld. DR relied upon the order of the appellate authority and requested that the same may be confirmed. 7. We have considered the facts of the case, the submissions ....
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....t the appellant failed to substantiate his claim and could not furnish any details/documents, the books of account have rightly been rejected by the AO. The appellant has also submitted that once the income has been estimated and the books has been rejected addition u/s 69A/68 cannot be made. I find that addition u/s 69A has been made with respect to cash deposit of Rs. 40,35,000/-made during demonetization period in specified bank notes. The AO has already reduced this amount from total turnover while estimating turnover. In case of Kale khan Mohammad Haneef vs. CIT [1963] 50 ITR 1 (SC), Hon'ble Supreme Court held that: "Whether having regard to the fact that the Income-tax Officer has assessed the income on a percent....
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....it rate never exceeded 1.29%. However, when queried by the Bench as to whether in any of the assessment years the return was scrutinized, the Ld. AR could not give any definite answer in this regard. However, when proposed by the Bench that as the books of account were liable to be rejected since the required details were not filed, the net profit rate had to be applied, the Ld. AR had no objection if the net profit rate of 2.5%, being a reasonable net profit rate, was applied considering the past history of the case and the facts of the case. Therefore, we reduce the net profit rate of 5% applied by the Ld. CIT(A) to 2.5% with consequential relief to the assessee. The Ld. AO is directed to apply the same to the total turnover of the assess....