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2021 (5) TMI 658 - AT - Income TaxAddition of low Gross Profit - non rejection of books of accounts - HELD THAT:- AO has failed to point out any serious defect in maintenance of books of accounts except comparing Gross Profit Ratio of preceding years and making fall in GP ratio as main basis for rejection of books results. CIT(A) has also held that there was no change in method of accounting and it is settled law that AO cannot doubt the genuineness of books of accounts merely because there has been reduction in Gross Profit Ratio in comparison to earlier years. The Ld. CIT(A) has relied upon the decision of Hon`ble Gujarat High Court in the case of CIT Vs. Vikram Plastics & Others [1998 (8) TMI 43 - GUJARAT HIGH COURT] wherein it was held that if there was no discrepancy or defect pointed out in the books of accounts and if there is no material brought on record that purchases and expenses were inflated or sales suppressed then books of accounts cannot be rejected. The Ld. CIT(A) has also discussed that the product - service mix in A.Y.2012-13 was 42:58 which was 86:14 in A.Y.2014-15, obviously the GP ratio would be on lower side as compared to A.Y.2012-13. The Ld. CIT(A) has also held that the AO could not cite any comparable case from the same line of business to prove that assessee's profit margins is on lower side. Based on the facts narrated above, we note that ld CIT(A) has reached on right conclusion therefore we are constrained to agree with the findings of the ld CIT(A). Thus, this ground of appeal raised by the Revenue is dismissed. TDS u/s 195 - Disallowance u/s 40(a)(ia) - assessee company had purchased software called pacor clients software with hasp key note from Computer system and Networking (foreign supplier of the software) - HELD THAT:- CIT(A) held that impugned payment was not made for acquiring any copyright but "copyrighted material" and payment was for purchase of goods and not towards Royalty. Hence, the assessee was not having any liability to deduct tax u/s195 of the Act. Accordingly, ld CIT(A) deleted the addition correctly. - Decided against revenue.
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