| The Tax Publishers2022 TaxPub(DT) 4552 (Jp-Trib) INCOME TAX ACT, 1961
Section 68 Section 145(3)
When AO clearly made out a case of non-genuine purchase made by assessee then instead of making the addition under section 68 the income of assessee ought to have been estimated after rejecting books of accounts and applying appropriate and reasonable rate of GP/NP. Accordingly, AO was directed to estimate income of assessee on the basis of turnover shown by applying a proper and reasonable basis being GP/NP rate.
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Accounting method - Rejection - Non-genuine purchase made by assessee - AO made addition under section 68, instead of rejecting assessee's books
Assessee failed to establish existence of sundry creditors and the genuineness of the transactions and consequently the claim of sundry creditors of Rs. 17,31,09,008 was treated as bogus liability leading to the addition on account of unexplained credits under section 68. Assessee pleaded that addition made under section 68 on account of trade creditors was unlawful, illegal and not justified but in any case only a profit element in respect of unverifiable purchase could be added instead of taxing the entire amount of trade creditors as income. Held: When AO clearly made out a case of non genuine purchase made by assessee then instead of making the addition under section 68 the income of assessee ought to have been estimated after rejecting books of accounts and applying appropriate and reasonable rate of GP/NP. Accordingly, AO was directed to estimate income of assessee on the basis of turnover shown by applying a proper and reasonable basis being GP/NP rate.
Relied:Pr. CIT v. Mohmmad Haji Adam & Co. ITA No. 1204 & 1012 & 2016.
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2014-15
IN THE ITAT, JAIPUR BENCH
S. SEETHALAKSHMI, J.M. & RATHOD KAMLESH JAYANTBHAI, A.M.
Ankush Gokhroo v. ITO
ITA No. 387/JP/2018
30 June, 2022
Assessee by : Piyush Chhajed, CA
Revenue by : Saroj Kumar Dubey, CIT
Rathod Kamlesh Jayantbhai, A.M.
This appeal by the assessee is directed against the Order, dated 15-3-2018 of the learned Commissioner of Income Tax, Appeals-I, Jaipur (here in after learned Commissioner (Appeals)) for the assessment year 2014-15 which in turn arises from the order passed by the Income Tax Officer, Ward-1(5), Jaipur passed under section 143(3) of the Income tax Act, 1961 (in short 'the Act') dated 28-12-2016.
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