Case Law Details
Indus Holidays & Tours India (P) Ltd. Vs ACIT (ITAT Indore)
Conclusion: AO was not justified in adding the entire suppressed receipts after rejection of books of accounts while making assessment u/s 153A as CIT(A) was fair enough to apply 2% of net profit rate on the alleged suppressed receipts by taking basis of net profit rate disclosed by the assessee for various assessment years which ranges from 0.5% to 2.05%.
Held: During the course of search u/s 132 conducted on assessee’s premises some loose papers and documents were seized . Assessee was unable to satisfy the lower authorities that these seized documents referred to by AO was a dumb document. AO made the addition for suppression of receipts @10% for all the assessment years. On appeal, CIT(A) after observing the net profit rates disclosed by assessee in the regular books of accounts applied the net profit rate @2% treating it to be as reasonable and computed the addition on account of suppressed receipts. Thus, the addition on account of suppressed receipts was worked as under applying a net profit rate of 2% on the enhanced turnover on account of suppressed receipts. It was held that incriminating material found during the course of search contains certain transactions relating to assessessee’s business which was not explained satisfactorily by assessee before lower authorities and also justified the action of AO of rejecting the books of accounts and estimating the suppressed receipts. Thus, CIT(A) was fair enough to apply 2% of net profit rate on the alleged suppressed receipts by taking basis of net profit rate disclosed by the assessee for various assessment years which ranges from 0.59% to 2.05%.
FULL TEXT OF THE ITAT JUDGEMENT
The above captioned bunch of appeals filed at the instances of the assessee’s pertaining to Assessment Year 2007-08 to 2013-14 and revenue’s appeal pertaining to Assessment Years 2011-12 to 2013-14 in the case of Indus Holiday & Tours India Pvt. Ltd are directed against the orders of Ld. Commissioner of Income Tax (Appeals)-3 (in short ‘Ld.CIT(A)’], Bhopal detailed as under;
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