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2016 (10) TMI 965 - ITAT HYDERABADRejection of Books of Account - GP addition - Held that:- Assessee’s Books of Account were rejected for valid reasons. In fact in the course of survey, AO did not verify all the vouchers and Books of Account and arrived excess stock as quantified in the survey at ₹ 47,05,008/-, for which assessee admitted that inventory was taken correctly. The Managing Partner in fact admitted additional income of ₹ 30 Lakhs in the course of survey. Keeping that in mind and also noticing that assessee has offered only an income of ₹ 6,467/- in the return of income, there is reasonable cause for rejection of Books of Account and estimating the gross profit. Coming to the issue of excess stock also, Ld. CIT(A) has examined the contentions viz-a-viz., various sale bills and tag prices and has reasonably estimated the reduction to be about 30%, which is reasonable on the given facts. In view of this, to the extent of estimation of gross profit and estimation of stock on the day of survey, I agree with the findings of the Ld. CIT(A). However, find that there cannot be two additions on the same issue. Therefore, the addition made viz-a-viz the gross profit can be telescoped to the addition which was made on excess stock. Accordingly, AO is directed to telescope the income added as gross profit addition to the excess stock determined after the order of CIT(A). Thus, assessee gets partial relief. Grounds are accordingly allowed partially.
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