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2015 (6) TMI 888 - AT - Income TaxEstimation of income - G.P. addition on account of unaccounted sale of stock - CIT(A) restricted addition - whether the GP rate of 10% is to be applied or the GP rate of 30.87% is to be applied on the sale of stock presumed to have been made outside the books? - Held that:- Considering the facts of the case and the arguments of both the sides, we do not find any justification to interfere with the order of the CIT(A). The shortage is of raw material and therefore, the normal presumption is that the raw material was sold outside the books by the assessee. If the Revenue claims that the assessee converted the raw material into finished goods, then the finished goods was sold outside books and the Revenue has to bring some corroborative evidence for such presumption. No corroborative evidence has been brought on record that the raw materials have been converted into finished goods and then the electrical transformers have been sold outside the books. In view of the above, we agree with the finding of the CIT(A) that the sale outside the books was of the raw material and not of the electrical transformers. Therefore, in our opinion, the applicability of GP rate of 10% on the sale of raw material by the CIT(A) is fully justified. - Decided against revenue.
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