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2016 (7) TMI 263 - AT - Income TaxAO rejected the books of accounts of the assessee and applied GP @ 2.39% taking average of 2 earlier years on gross turnover - CIT(A) reduced GP rate reduced from 2.39% to 1.50% - Held that:- Finding of fact is not controverted by the revenue by placing any contrary material on record. The revenue has not disputed the fact that in the year under appeal there is increase in the sales and the margin as stated by the assessee is not rebutted by the revenue by bringing any material which suggest that the margin as claimed by the assessee is not correct. In the absence of such finding, we are unable to accept the contention of the ld. D/R that the ld. CIT (A) was not justified in reducing the rate of Gross Profit. - Decided against revenue Addition on account of unexplained cash credits - CIT (A) deleted the addition by observing that when profit has been estimated by applying a particular GP rate, no further addition can be made by placing reliance on the judgment of Hon’ble Jurisdictional High Court in the case of CIT vs. G.K. Contractor [2009 (1) TMI 840 - RAJASTHAN HIGH COURT ] - Held that:- The judgment as relied on by the ld. CIT (A) pertains to the business outstandings. From the paper book as filed, in Annexure-B to Form No. 3 CD, it is stated that the loan from M/s. B.K. Industries is of ₹ 2,50,000/-. However, in respect of M/s. Pooja Steels, ₹ 1,00,000/- also treated as loan. There is no material available on record suggesting that these amounts were treated as advances and related to any sales or purchases. The onus is on the assessee to demonstrate that such loans/credits were related to business/trade of the assessee. In the absence of such material, treating the same as trade advance would not be correct. Hence the ratio as laid by the Hon’ble Jurisdictional High Court would not help the assessee. Accordingly this ground of revenue’s appeal is allowed and the impugned order on this issue is set aside. The addition made the AO on this issue is sustained - Decided against assessee
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