2013 (8) TMI 946

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..... herefore, no recourse was left with the AO except applying the profit on the basis of best judgment. In immediately preceding year, the turn over of the assessee on which the profit was shown at 3.37%, whereas in the year under consideration the AO applied 5%. In our view, the net profit rate applied by the AO is not exorbitant. Therefore, we confirm the application of NP rate of 5% on the facts o .....

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..... Per Shri R.K.Gupta J.M. : This appeal has been filed by the assessee against the order of learned CIT(A)-23, Mumbai for assessment year 2007-08. 2. The assessee is objecting in confirming the estimated income of ₹ 6,96,448/- computed by the AO at the rate of 5% net profit on gross receipt of ₹ 2,39,20,840/- and confirming the addition of ₹ 94,84,133/- under Section 4 .....

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..... its audit report, nor any list of sundry creditors, sundry debtors, etc. Therefore resorting the Section 41(1), the AO made an addition of ₹ 94,84,133/- by finding out that this much amount is outstanding on account of sundry creditors. 4. Learned CIT(A) has confirmed the action of the AO. Now, the assessee is in appeal here before the Tribunal. 5. Learned counsel of the assessee stat .....

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..... O applied 5%. In our view, the net profit rate applied by the AO is not exorbitant. Therefore, we confirm the application of NP rate of 5% on the facts of the present case. This ground of the assessee fails. 8. In respect to addition made under Section 41(1), it was stated that once the net profit has been applied then no further addition can be made on account of any expenses or on account of .....

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..... . Therefore, for this reason also, the application of provision of Section 41(1) were not justified. In view the above facts and circumstances of the case, we allow this ground of the assessee by deleting the impugned addition made. 11. In the result, appeal of the assessee is allowed in part. Order pronounced in the open court on this 7th day of Aug.2013. - - TaxTMI - TMITax - Income T .....

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