DCIT Vs M Z Enterprise (ITAT Ranchi)
ITAT Ranchi matter of addition based on low net profit remanded the matter back to the file of CIT(A) for re-examination of facts based on books of accounts and other related documents produced.
Facts- During the course of survey proceedings, the statement of one of the partners of the firm Mr. Zinu, was recorded, who had stated that he earns commission @ 5.5% from M/s Shapoorji Pallonji for supply of manpower. However, from ITR filed by the assessee it was observed that the assessee has shown only 0.84% as his profit. It is pertinent to note that the assessee has failed to produce his books of accounts during the course of survey proceedings. Therefore, it is clear that the assessee has failed to show his true income in his ITR filed and his books of accounts are liable to be rejected. Thus, the net profit of the assessee is calculated at 5.5% of his turn over i.e. at Rs. 3,95,51,000/-. The assessee has shown mere profit of Rs. 60,29,926/-. Based on the facts and circumstances of the case, the difference i.e. Rs. 3,35,21,075/- is added back to the total income of the assessee.
