Case Law Details
Cuttack bench of the Income Tax Appellate Tribunal (the Tribunal) in the case of R.R. Caryying Corpn. Vs. ACIT [2009] 126 TTJ 240 (Cuttack) held that only the embedded portion of the profits is to be considered as taxable and not the entire amount in the case of discrepancies between the sales or receipt amount as per books of accounts and the amount shown in TDS certificate, for tax ability purpose.
Accordingly, the Tribunal directed the Assessing Officer (AO) to adopt the gross profit rate declared by the taxpayer for the assessment year under consideration and compute addition accordingly.
Facts of the case
The taxpayer was engaged in the transport business. During the course of assessment proceedings, the AO found the discrepancies of INR 1.4 million between the receipts shown in the TDS certificate submitted and the books of accounts of the taxpayer. Accordingly, the AO made an addition of INR 1.4 million as undisclosed transportation receipts which was also confirmed by the Commissioner of Income-tax (Appeals).
Taxpayer’s contentions
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