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2017 (6) TMI 387 - AT - Income TaxRejection of books of accounts - estimation of G.P rate - Held that:- AO has rejected the books of accounts holding that firstly, the books of accounts have continuously been rejected in the earlier years and secondly, the assessee is not maintaining stock register. In the earlier years, the matter had come up before the Coordinate Benches and the books of accounts have been accepted.Given that there are change in the facts and circumstances of the case, respectfully following the orders passed by the Coordinate Benches in earlier years, the books of accounts cannot be rejected. Regarding estimation of G.P rate, the assessee has disclosed a G.P rate of 20.79% as against G.P rate of 19.87% in AY 2010-11 and 21.09% in AY 2009-10. The AO has stated that there is set history in the case of assessee where G.P rate of 31% has been applied and also upheld by the ld CIT(A) and accordingly, he substituted the G.P rate of 20.79% disclosed by the assessee with G.P rate of 31%. In the earlier years, the G.P rate of 31% has not been accepted by the Coordinate Benches and the G.P rate offered by the assessee was accepted. In light of above, following the orders of the Coordinate Benches and the assessee’s past history, we donot see any justification for AO to interfere with the G.P rate of 20.79% offered by the assessee. In the result, addition of ₹ 21,00,160 is hereby deleted Disallowance made towards travelling, postage, telephone, officer repair and maintenance, etc holding that these were not fully supported by proper bills and also due to the personal element in these expenditure. The ld CIT(A) found the disallowance towards travelling expenses at 15% is on the higher side and restricted it to 10% and rest all disallowances were confirmed.
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