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2019 (11) TMI 515 - AT - Income TaxRejection of books of accounts u/s 145(3) - purchase not genuine and not verifiable - Addition being 15% of alleged unverifiable purchases - HELD THAT:- In any case of best judgment, though the element of guess work is involved, however the guess work should have nexus with the material on record and discretion must not be exercised arbitrarily or capriciously. For the purposes of making the best judgment assessment, past history of the assessee has been held as reliable and reasonable basis for estimation of profits. Alternatively, comparable cases in the similar line of business should be considered. In the instant case, being the first year of operations, past history is not relevant and hence, considering the comparable case of M/s Kedia Exports Pvt. Ltd., which has declared the GP rate of 10.04% as against 11.41% declared by the assessee, we are of the considered view that no addition should be made in the hands of the assessee company. As relying on M/S ALLIED GEMS CORPORATION AND VICE-VERSA [2017 (12) TMI 1252 - ITAT JAIPUR] additions so made and sustained by the ld. CIT(A) is hereby directed to be deleted and the appeal of the assessee is allowed.
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