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2021 (8) TMI 502 - AT - Income TaxRejection of books of accounts - Estimation of gross profit - CIT(A) has upheld the rejection of books of accounts by invoking provisions of section 145(3) and has estimated gross profit rate of 25% as against gross profit rate of 23.60% declared by the assessee - HELD THAT:- As rightly held by the ld. CIT(A), the past history of the assessee provides a reasonable and rationale basis for such estimation or comparable third party data which is absent in the instant case. In the past, on perusal of assessee's submission before the ld. CIT(A), we note that the assessee has disclosed a gross profit of 27.05% in A.Y 10-11, 26.16% in A.Y 2011-12 and 17.04% in A.Y 2012-13 and these past years results have apparently not attained finality as the matters are pending before the AO in the set-aside proceedings before the AO for A.Y 2010-11 and before the ld. CIT(A) in other years. Nothing has been brought on record in terms of finality of past year results. Therefore where the past years results have not attained finality and even third party comparable data is not on record, we are constrained to remand to the file of the AO for the limited purposes of determining the past years gross profit rate as have attained finality and apply the average of such gross profit rate which have attained finality to the year under consideration. In the result, the ground is allowed for statistical purposes.
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