The Tax Publishers2019 TaxPub(DT) 6640 (Mum-Trib)

INCOME TAX ACT, 1961

Section 145

Since CIT(A) had resorted to reject the books of account of the assessee only in respect of contract business and determined the net profit thereon at 9%, thus, it was a classic case of rejection of books of account of the assessee partially by CIT(A), which is not permissible in law.

Accounting method - Rejection of books of account - Partial rejection of books, whether justified -

Issue arose for consideration as to whether CIT(A) was justified in upholding the action of AO in rejecting the books of account of assessee and confirming the addition made of net profit at 9% of total turnover on an estimated basis subject to minor corrections in the figures. Held: CIT(A) had resorted to reject the books of account of the assessee only in respect of contract business and determined the net profit thereon at 9%. This was a classic case of rejection of books of account of the assessee partially by CIT(A). This was not a fit case for rejection of books of account and book results under section 145(3) and estimating the net profit of the assessee thereon. AO was directed to delete addition made towards estimation of net profit and accept the book results of the assessee in the facts of the instant case.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :



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