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TMI Blog2013 (12) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... tries in the account books whether suspicious or not cannot be relied by the revenue or the assessee - The income has been estimated at 10% gross profit rate - Decided in favour of assessee. - I.T.A. No. 122 of 1999 - - - Dated:- 22-10-2013 - Rajive Bhalla And Dr. Bharat Bhushan Parsoon,JJ. For the Appellant : Ms. Savita Saxena, Advocate For the Respondent : Mr. Alok Mittal, Advocate ORDER Rajive Bhalla, J (Oral) The revenue has filed an appeal, under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as, the Act) to challenge order dated 28.4.1999 passed by the Income Tax Appellate Tribunal (for short, the Tribunal), Amritsar Bench, Amritsar, whereby order dated 14.3.1990 passed by the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partly allowed the appeal by holding that as account books have been rejected, entries therein cannot be relied for addition to income. However, after holding as above, the Commissioner of Income Tax (Appeals) enhanced the flat rate from 10% to 12.5%. The revenue filed an appeal whereas the respondent filed crossobjections before the Tribunal. Vide the impugned order, the Tribunal has dismissed the appeal filed by the revenue and accepted the cross-objections filed by the assessee by holding as follows: 9. As far as ground taken by the assessee in his cross objection regarding the application of rate of 12.5% by the CIT(A) against the rate of 10% applied by the A.O. concerned, in our opinion, looking into the facts that the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Commissioner of Income Tax (Appeals) by holding that as account books were rejected in their entirety, entries in account books could not be relied for making additions to income. The Tribunal, however, restored the gross profit rate of 10% applied by the Assessing Officer. Counsel for the revenue submits by reference to Section 68 of the Act, that even if account books are rejected, an Assessing Officer may, where any unexplained entry appears in the account books, add the amount reflected in the entry to the income of an assessee. The mere fact that account books have been rejected in their entirety or in part cannot be construed to limit the operation of Section 68 of the Act. It is further submitted that Section 68 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld, in essence, render account books valid for certain purposes and invalid for others, a course impermissible in law. The Assessing Officer rejected the account books in their entirety and thereafter proceeded to assess income by applying a flat rate of profit of 10%. After applying a flat rate of profit of 10%, the Assessing Officer added Rs.1,98,298/- to the income of the assessee on the basis of certain 'entries' deemed to be suspicious. The Commissioner of Income Tax (Appeals) as well as the Tribunal have rightly held that as books of accounts were rejected in their entirety, the Assessing Officer could not rely upon any entry in the books of accounts for making an addition of Rs.1,98,298/-. A bare reading of Section 68 of the Act woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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