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2012 (8) TMI 92 - ITAT, AHMEDABADAddition on account of low GP - CIT(A) deleted the addition - Held that:- It is undisputed fact that the AO has simply made comparison of GP ratio of the assessee with another firm and drawn adverse inference - has not brought any evidence on records to indicate that the assessee has suppressed any production or made any sales outside the books of accounts. The observation of the AO is that there is minimum suppression of production of 50,000 kg. of yarn is based on presumption and not on the basis of any cogent evidence or supporting documents - the nature of business of two firms are different and cannot be compared as assessee manufactures grey cloth which is used for dress material whereas the grey cloth manufactured by other firm used for comparison is used for sarees - against revenue. Disallowance of telephone & vehicle expenses - Held that:- CIT(A) considered the disallowance of 20% to be on higher side and therefore restricted the disallowance to 10% - no interference is called for in the order of the CIT(A) - against revenue.
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