ITAT Jaipur Judgments — July 2017

The Tribunal held that the Assessing Officer's disallowance was based on suspicion and general reports without specific evidence against the assessee. The CIT(A) had rightly deleted the addition as there was no cogent material or verifiable evidence of wrongdoing by the assessee.

The Tribunal partly allowed the appeal. It deleted the lump sum addition of Rs. 5,00,000/- and also deleted the addition confirmed by the CIT(A) regarding freight expenditure under Section 40(a)(ia) as the payments were within the limits prescribed by Section 194C.

The Tribunal held that while the rejection of books of accounts was justified, the estimation of net profit rate should be based on the average of the past five years. The variation of 0.08% from the declared rate was considered minor and ignorable, directing deletion of the addition.

The Tribunal restored the application to the Pr. CCIT for reconsideration, noting that considerable time had elapsed since the application was filed. The Pr. CCIT was directed to grant exemption from the date the assessee became eligible.