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2014 (1) TMI 1367 - ITAT INDOREUnaccounting stock - rejection of books of accounts - Whether income surrendered during survey is assessable as income u/s 69 or business income - Held that:- The Assessing Officer has pointed out discrepancies/defects in the books of accounts and thereafter rejected the book result - The survey team has taken the physical inventory and after comparing the inventory recorded in the regular books of accounts came to the conclusion that the assessee has unaccounted stock of Rs. 95,94,251 - Physical cash found during survey, when compared with the cash balance shown in the regular cash book, the same was found to be excess by Rs. 9,00,749 - The Assessing Officer has also pointed out certain instances, which indicated discrepancies in the books of accounts. - The Assessing Officer's action in rejecting books of accounts was correct. Addition on account of low G.P. rate - The sale of assessee has increased to Rs. 13.31 crores as compared to sale of immediately preceding assessment year at Rs. 11.65 crores - It is a well settled proposition that increase in turn over can be achieved only by sacrificing some margin in gross profit rate - Taking into account increase in sale vis-à-vis gross profit rate shown in the earlier years, the Tribunal found it suitable to apply gross profit rate of 2.50 % - The Assessing Officer is directed to work out trading addition by applying gross profit rate of 2.50 % on the sales of Rs. 13,31,26,701 - Decided in favour of Revenue.
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