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2017 (2) TMI 1513 - AT - Income TaxRejection of books of accounts - gross profit estimation - no item wise information on stock of jewellery given - As per DR GP rate of 30% applied by the AO was correct since it was based on GP ratio shown by comparable cases - HELD THAT:- As gone through the order of Vivek Jain Prop. Vijay Jewellers [2016 (11) TMI 1714 - ITAT CHANDIGARH] wherein I.T.A.T. held that in view of the nature of business carried out by the assessee and the trading of items as per customer’s preference the FIFO method could not be applied as suggested by the Assessing Officer. The Hon'ble I.T.A.T., therefore, held that the rejection of books of account was incorrect and addition made on account of estimation of gross profit was, therefore, set aside. In the present case, we find that the basis for rejection of books is similar to that in the case of Vivek Jain Prop. Vijay Jewellers (supra) being that item-wise information of stock of jewellery had not been furnished by the assessee. Merely because item-wise details were not maintained, it could not be said that the books did not disclose true result of the assessee. The Ld. CIT (Appeals), we find, correctly held that no specific defect has been pointed out by the Assessing Officer by bringing on record any adverse material. Further, undisputedly, the books of account of the assessee were duly audited and there is no finding to the effect that the assessee had inflated the cost of raw material or cost of processing or that he had made sales outside the books or that the sale price were suppressed. The assumption of the Assessing Officer was clearly therefore sans documentary proof. The Ld. CIT (Appeals) has also given finding of fact that the gross profit rate shown by the assessee is progressive having increased from 12.48% in the preceding year to 14.30% in the year under consideration. In view of the same, we agree with the Ld. CIT (Appeals) that there is no reason at all to reject the books of account of the assessee and estimate the gross profit. - Decided against revenue.
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