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| The Tax Publishers2020 TaxPub(DT) 3467 (Gau-Trib) : (2021) 186 ITD 0260 : (2020) 207 TTJ 0490 INCOME TAX ACT, 1961
Section 143 (3)
Assessee produced all books of account, vouchers, bills and other documents but AO without pointing out any mistake and error in the bills/vouchers and without rejecting books of account, made addition @8% on suspicion and conjectures that assessee might be inflating its expenses and showing net profit ratio at a very low rate. Therefore, ends of justice would be met, if net profit rate of 2.50% was adopted.
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Assessment - Addition to income - Estimation of profit at higher rate merely on basis of suspicion and conjectures, however, without rejection of books -
As turnover of assessee was more than prescribed limit for audit but assessee did not get account audited. At the same time, in terms of percentage net profit ratio came at 0.99%, which was less than 8% as required by section 44AD. Accordingly, AO applied section 44AD and completed assessment by making estimation of income at the rate of 8% of turnover declared by assessee. Held: Assessee produced all books of account, vouchers, bills and other documents but AO without pointing out any mistake and error in the bills/vouchers and without rejecting books of account, made addition @8%. On basis of suspicion and conjectures that assessee might be inflating its expenses and showing net profit ratio at a very low rate. Therefore, ends of justice would be met, if net profit rate of 2.50% was adopted.
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2014-15
IN THE ITAT, GAUHATI BENCH
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