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2022 (3) TMI 345 - AT - Income TaxRejection of books of accounts - as per AO gross profit rate declared by the assessee is very low and the books are not reliable - CIT-A deleted the addition - HELD THAT:- Assessee in the instant case has maintained its books of accounts and such books of accounts were duly audited and the auditors have not pointed out any mistakes in the books of accounts. Such audited books of account along with bills and vouchers were produced before the AO and no specific defects were pointed out by the AO in the books of accounts. The submission of the ld. Counsel for the assessee that out of 199 retail outlets, the company has closed down 84 outlets could not be controverted by the ld. DR. The submission of the ld. Counsel for the assessee that the turnover of the assessee consists of the three streams i.e. retail sale of garments, trading of fabric and wholesale trading of garments, also could not be controverted by the Ld. DR. Under these circumstances, we are of the considered opinion that merely because there is a fall in the gross profit rate cannot be a ground for rejection of the book results in absence of any specific defects being pointed out by the AO. Even in his remand report also, as mentioned by the Ld. CIT(A), the AO has not found any discrepancy in the data furnished by the assessee and no adverse remarks have been made by the AO except objecting to the submission of the data on the ground that during the course of assessment proceedings such explanation was not furnished by the assessee. Although, the ld. CIT(A) has called for a remand report from the AO and has given an opportunity to the AO to make his submission, however, the AO has not pointed out any defects or mistakes in the various details furnished by the assessee. See WINNER CONSTRUCTIONS PVT LTD [2012 (5) TMI 394 - DELHI HIGH COURT], M/S PARADISE HOLIDAYS [2010 (4) TMI 111 - DELHI HIGH COURT] and JACKSON HOUSE [2010 (8) TMI 1156 - DELHI HIGH COURT] Thus book results cannot be rejected or addition of gross profit cannot be made on the sole or mere fact that the gross profits are very low - Decided in favour of assessee.
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