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2017 (9) TMI 184 - AT - Income TaxRejection of books of accounts - Estimation of GP ratio on basis of average of three years - fall in Sales over three preceding years - Held that:- There is no finding that there is sale outside books of account or that a part of sale proceed has not entered in the books of account. The submissions before the ld. CIT(A) that the turnover has drastically come down for assessment year 2010-11 as compared to assessment years 2008-09 and 2009-10 also could not be controverted by the ld. DR. A perusal of the various details furnished by the assessee shows that during assessment year 2008-09 the sale was ₹ 7.18 crores and in 2009-10 the sale was ₹ 10.30 crores where as during assessment year 2010-11 turnover had come down to ₹ 1.38 crores. The Director’s report mentions that the company had to suspend its business activity during the financial year 2010-11. Assessee had furnished item wise quantity and value details of stock, purchase and sale.We find that Assessing Officer has overlooked the loss on various items suffered by the assessee and had only gone for items on which the assessee had made profit. He has not pointed any other mistake in the books of account which were duly audited and produced before him. We, therefore, find merit in the argument for the assessee that merely because there is fall in the GP ratio, the Assessing Officer cannot reject the books of account and go for estimation of profit. - Decided against revenue
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