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2021 (11) TMI 262 - AT - Income TaxRejection of books of accounts u/s.145 - Addition on account of low gross profit - HELD THAT:- There is no doubt that assessee Gross Profit was estimated @10.31% in A.Y. 2010-11 to 2012-13. For the year under consideration, the assessee has declared Gross Profit @8.38%. The assessee claimed that in the immediately preceding year the Gross Profit percentage was Nil and the profit of assessee increase substantially and it should be accepted as it is - Gross Profit of the assessee has been consistently adjudged being estimated @10.31% in preceding years. There cannot be any consistent Gross Profit for several years. And on perusal of comparative chart of gross profit, we find that business of assessee in terms of turnover has increased from ₹ 14.64 crore in A.Y. 2012-13 to ₹ 19.87 crore in the year under consideration. The assessee claimed that incidental cost and cost of raw material is increased. We find that the assessee raised the similar plea before the AO - AO has not countered such fact. Considering the fact and circumstances of the case that turnover of the assessee is increased, the estimation of 10% Gross Profit will meet the possibility of Revenue leakage and would meet the end of justice, therefore, we direct the AO to estimate the Gross Profit @10%. Penalty u/s 271(1)(c) - HELD THAT:- There is no dispute that AO while passing the assessment order under section 143(3) on 16.02.2015, made addition by rejecting books of accounts and thereby made addition on estimation basis by estimating Gross Profit @10.31%. The AO levied penalty on the said estimated additions. We find that similar penalty were levied in earlier years i.e. 2009-10, 2010-11 and 2011-12. The same was deleted by the ld.CIT(A) and on further appeal before the Tribunal, the order of ld.CIT(A) was upheld. - Decided against revenue.
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