Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 1236 - AT - Income TaxTrading addition - gross profit rate determination - rejection of books of account - Held that:- Undisputedly, the books of account have been rejected under section 145(3) and the assessee has not challenged such rejection of books of account. Regarding the estimation of gross profit rate, the assessee has not satisfactorily explained the reason for the fall in the gross profit rate from 7.3 per cent. last year to 6.04 per cent. this year except for the fact that the turnover has increased over the last year which has put pressure on the gross margins in the business. The Assessing Officer has compared the results with another liquor contractor who has declared a gross profit of 13.92 per cent. and has applied the same in the instant case without highlighting the comparability parameters. The learned Commissioner of Income-tax (Appeals) has accepted the assessee's contention regarding pressure on the gross margins in view of increase in the turnover and at the same time, looking at the past history, estimated the gross profit rate of seven per cent. In the peculiar facts and circumstances of the case where there is no satisfactory explanation to substantiate the fall in the gross profit rate, we find the approach of the learned Commissioner of Income- tax (Appeals) was reasonable where he has followed the past history of the assessee. In the result, the grounds taken by both the assessee and the Revenue are dismissed. Additions under section 68 - Held that:- The cash deposits in the bank account has been examined by the jurisdictional Assessing Officer of Shri Mahendra Singh and the same has been accepted as evidenced by order passed under section 143(3) read with section 147 of the Act dated February 23, 2016 which is available on record. Apparently, the said order under section 143(3) read with section 147 has been passed subsequent to the order of the learned Commissioner of Income-tax (Appeals) but facts remain that the cash deposited has been found duly explained in his own assessment proceedings. In light of the same, there cannot be any basis to add the same amount in the hands of the assessee under section 68 of the Act. In the result, the Department's appeal to this extent is dismissed. Not allowing set off of trading additions against the addition of cash credit confirmed by him confirmed.
|