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2016 (11) TMI 799 - PUNJAB AND HARYANA HIGH COURTAddition made on account of low gross profit rate - rejection of the books of account - ITAT deleted addition - Held that:- AO adopted a gross profit rate of 41.50 per cent on the basis of the gross profit rate of M/s. Pardeep Publication involved in the similar business. That, however, cannot be the only ground for the purpose of determining the gross profit rate. CIT(Appeals) has dealt with the case of M/s. Pardeep Publication in considerable detail and found substantial differences between the assessee and M/s. Pardeep Publication. The publications of the two were also produced before the authorities. The assessee's books are of a higher quality. This was accepted even by the Assessing Officer. The assessee had given greater discounts on its books than that given by M/s. Pardeep Publication. Moreover, its cost of production would be higher as the size of the paper used by M/s. Pardeep Publication in one of its books was less than that of the paper used by the assessee. The increase in the cost of paper itself was 60 per cent. The quality of the paper was also different the assessee having used thicker paper. There were more colours in the assessee's publication which would in turn increase the cost of publication. The Tribunal accepted this approach and the finding. The Tribunal also noted that in the earlier years, the assessee's gross profit rate varied between 21 per cent. to about 24 per cent. In the year in question, it was 25.34 per cent. The Tribunal did not, therefore, find the gross profit rate to be erroneous. - Decided against revenue
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