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2014 (2) TMI 847 - HC - Income TaxRejection of books of accounts u/s 145 of the Act – Estimation of GP rate @2%, whether on lower side or higher side - Held that:- The AO as well as the Tribunal noticed a rather irregular pattern of output by the assessee in comparison to the electricity consumption - the average production from using of power consumption widely fluctuated from month to month - The explanation rendered by the assessee was not accepted - the Tribunal noted that in addition to such fluctuation in the output ratio, the assessee also did not record the work in progress in its books of accounts - The Tribunal has rightly recorded that the CIT (Appeals) thus effectively and essentially rejected the books of accounts of the assessee - In addition to wide fluctuation in the productivity compared to the electricity consumption, significant factor was that the assessee had not recorded the work-in-progress in the books of accounts. The assessee has produced no evidences - If the oil output was vastly different for different oil seeds, which was the reason for fluctuation in productivity, the assessee could have easily demonstrated from the books of accounts and other literature - Merely suggesting that the Gujarat Electricity Board would issue the bills for minimum contracted units without full consumption, is merely stating the obvious – thus, the ground does not involve any substantial question of law – Decided against Assessee. Addition on account of gross profit ratio – Both Revenue and Assessee are in appeal regarding the estimation of GP ratio – Held that:- In the absence of any satisfactory explanation, the fact provides a reasonable basis for working out the suppressed production on the basis of units of power consumed in remaining months of the year – thus, the additions made were sustained by the Tribunal - The issue is based on appreciation of material on record - The Tribunal having given its consideration and having adopted the GP rate of 2% by giving its own reasons – thus, no substantial question of law arises for consideration – Appeal Rejected for both revenue and assessee.
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