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2012 (11) TMI 1081 - AT - Income TaxAddition made on account of books purchases from Shree Laxmi Industrial Corporation - Held that:- When sales declared by the assessee have not been doubted, it was not proper on the part of the AO to deny the claimed purchases on the basis of which sales were made. Only option if any was available with the department was to estimate the income of the assessee during the year on the basis of trading result of earlier three years, made available at page no- 38 of the paper book filed on behalf of the assessee. As during the year, the assessee has shown better gross profit at a better GP rate of 27.67 % in comparison to the GP profit and GP rates of earlier two AYs. In the AY 2005-06, the assessee has shown GP rate on 25.67 % and in AY 2004-05, the GP rate shown is 25.47%. Since the assessee has shown better GP rate during the year, we find that there is no justification to make addition even on this account. We thus while setting aside the orders of the authorities below on the issue direct the AO to delete the addition in question at ₹ 43,34,496/- made by the AO on account of the alleged bogus purchases made from Shree Laxmi Industrial Corporation.
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