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2012 (7) TMI 553 - ITAT, AHMEDABADReopening of assessment u/s.147 of the Income Tax Act - grievance of the assessee is that the AO did not supply copies of the reasons recorded even when specifically was asked for from the A.O – Held that:- Before issue of notice under the section the AO shall record his reasons for doing so. Since the AO did not provide the assessee - reopening was bad in law, hence quashed. Addition made by rejecting of books of accounts - AO directed to estimate gross profit @ 22% by adopting the average Gross Profit of last six years as against 30% estimated by the Assessing Officer – Held that:- AO relied upon a part of a transaction for the preceding year while rejecting the other - This is not permissible in law - Without pointing out any error in the P&L a/c and the audited report, the powers of best judgment assessment could not be invoked. The principles of best judgment assessment do not appear to have been followed by the AO - in the absence of any specific adverse material on record, the AO was not justified in applying an adhoc gross profit rate which was rightly reduced by ld.CIT(A) – addition deleted Addition made by rejecting of books of accounts – Held that:- AO is directed to delete GP addition because he has not pointed out single defect in the books of account in the year under consideration - AO has neither bothered to issue a show cause notice before rejecting the accounts of the appellant firm. Application of GP rate at 30% on receipts has been made by the AO without bringing any material on record to justify it, without even caring to mention that he is applying 30% rate as against 20.89% GP rate shown by the assessee
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