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2012 (12) TMI 5 - ITAT AHMEDABADDeletion of addition to Gross profit - fall in gross profit - rejection of books of accounts - business of job work of diamond and export of diamond - CIT(A) has deleted the entire addition on the ground that the assessee has properly explained the fall in GP ratio and no specific defects were pointed out in the books of account by the AO. The AO has rejected the books of account of the assessee as the basic data of the business from which correct profit could be deduced were not properly maintained by the assessee and if at all they were maintained, the same were not produced for verification before the AO at the time of assessment proceedings. Held that:- The intention of the Legislature in enacting section 44AA was to put an obligation on the assessee to maintain and keep primary records on the basis of which the Tax Authorities can ascertain and compute the correct income. Therefore, it was not the prerogative of the assessee to maintain the records in the manner in which it likes. Facts in this case are identical to the facts of the case before the ITAT Mumbai Bench in the case of DCIT vs. Samir Diamonds Exports (P) Ltd. [1998 (10) TMI 509 - ITAT MUMBAI BENCH]. Order of AO to enhance the gross profit by 4% of the total turnover restored. - Decided in favor of revenue.
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