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2019 (11) TMI 324 - AT - Income TaxEstimation of income - Rejection of books of accounts - Gross profits in post survey period at 12.69% - survey u/s.133A survey u/s.133A - unaccounted stock of yarn and unexplained cash deposits in bank account were detected which were accepted by the assessee as his undisclosed income - HELD THAT:- We are in agreement with CIT(A) that the rejection of books of account is justified, as in spite of specifically requirement made during the course of remand proceedings, the assessee could not produce the stock register and production register nor the assessee has able to justify the fall in GP rate in comparison to presurvey period and preceding years also. We find that the GP disclose during the post-survey period is at ₹ 30,83,474/- on sales of ₹ 3,25,72,550/- which comes to 9.46% whereas GP during a pre-survey period is 12.69% and GP for A.Y. 2007-08 is 10.09% and A.Y. 2008-09 is 10.00%. Therefore, it would be reasonable and fair and just to estimate the average GP rate from assessment year 2007-08 to pre-survey period which comes to 9.31% (10+79+10+12.69+9.46+3.65), therefore it would be met the end of justice if the GP rate is 9.35% is applied to post-survey sales amounting to ₹ 3,25,72,550/- which work out to ₹ 30,32,504/-. Therefore, the income of the assessee to this extent is sustained which inter-alia includes the returned of income of ₹ 4,20,413/- and including the disclosure made during survey. In view of this total income of the assessee determining at ₹ 30,32,504/- as against ₹ 33,65,089/- determined by the CIT(A). In view of this fact, these above grounds of appeal are partly allowed in favour of the assessee.
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