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2016 (11) TMI 437 - AT - Income TaxAddition on low G.P. - non rejection of books of account - Held that:- No defect has been pointed out by the AO in the books of account of the assessee which had been audited as per the provisions of section 44AB of the Act, nor have the same been rejected and therefore in our view the AO could not have disturbed the profits declared and proceeded to estimate the GP. We also find that the learned CIT(A) had, on factual examination, observed that the GP earned by the assessee on different items had a very wide GP range and therefore the assessee could not have earned consistent GP year after year. Details on record in this respect show that the assessee’s GP varied from 7.66% in A.Y. 2007-08 to 15.38% in A.Y. 2008-09, 5.9% in A.Y. 2009-10 (i.e. the year under consideration), 4.6% in A.Y. 2010-11 and 9.6% in A.Y. 2011-12. It is seen that the learned CIT(A) had also observed that apart from huge foreign exchange fluctuation loss suffered, i.e. of ₹ 1,01,98,459/- in the year under consideration, there were also instances of high sea sales which resulted in GP @ 2% and that such sales were not there in the immediately preceding year. Lastly, we also find that the learned CIT(A) observed that the assessee was able to place on record many instances of cases in the similar line of business in which may instance of sale had resulted in low GP and in loss also. In the peculiar factual matrix of the case, as discussed above, we concur with and uphold the finding of the learned CIT(A) that the AO was not justified in making the addition on account of low GP. - Decided against revenue
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