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2019 (9) TMI 1069 - AT - Income TaxEstimation of gross profit - rejection of books of accounts - CIT-A directing the A.O to accept the book results and delete the addition - HELD THAT:- Assessee is a corporate entity and it accounts were subjected to Audit under The Companies Act as well as under The Income Tax Act. No qualification / adverse remarks have been made by the auditors regarding maintenance of stock records / valuation etc. The figures of sale as well as purchases, on aggregate basis, as per books of accounts perfectly matched with assessee’s financial statements. The assessee had produced all sales as well as purchase invoices in digital form before AO during assessment proceedings. No discrepancies could be pointed out in the same by AO. Further, no specific defects were pointed out in the books of accounts as well. The whole allegation of AO emanates from figures reported by the assessee in Schedule 19 of the Balance Sheet, based upon which certain conclusions were drawn. Quantitative discrepancies, if any, stood explained by the fact that the assessee’s nature of business made it impractical to report the quantitiative details in the desired manner. The perusal of sample invoices, as produced before us, would support the fact that the assessee was procuring raw material from several vendors which would be assembled into a composite product which could be sold with or without software and the sale transaction could be with or without service contracts. Those facts would explain non-reporting of quantitative details in Schedule 19 of the Balance Sheet and therefore, the conclusions drawn by Ld. AO from the same would obviously distort the factual matrix. Gross Profit rate in earlier years were much lower after excluding the service income. So far as the reconciliation of Service income & TDS figures reported in Form 26AS is concerned, no specific allegation of non-reporting of any income has been made by Ld. AO in the quantum assessment order and therefore, no adverse conclusion could be drawn therefrom. FAA has clinched the issue in the right perspective and therefore, the same would not require any interference on our part. No convincing case has been made before us to remit the matter back to the file of Ld. AO. Therefore, by confirming the stand of Ld. CIT(A), we dismiss the appeal of revenue
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