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2024 (5) TMI 232 - ALLAHABAD HIGH COURTGross profit determination - addition of undisclosed profit in the hands of the assessee while framing the assessment u/s 143(3) - credibility of books of accounts of the assessee - substantial question of law or fact - Addition u/s 40-A(3) as the assessee had made cash payments of expenses exceeding Rs. 20,000/- under different heads - disallowance relating to unverified consignment sales expenses - Tribunal has dismissed the appeal filed by the revenue - HELD THAT:- There no finding was recorded by the AO to doubt the credibility or correctness or completeness of the books of accounts of the assessee. Yet, since the books of accounts of the assessee came to be rejected the Assessing Officer further proceeded to disturb the gross profit rate for the assessment year in question. Relying on gross profit rate achieved by the assessee in the previous three years, addition of about Rs. 3 crores was made. We find no error on part of the Tribunal in recording either of the above findings. Once the CIT (Appeals) looked into the vouchers of cash expenses and recorded a clear finding that those were duly vouched except for two expenditures, in absence of any material shown to establish that that finding was perverse, there survives no room to interfere with the confirmation of such finding by the Tribunal (the last fact finding authority). As to the issue of ad hoc disallowance of expenditure of consignment sale the Tribunal has rightly concluded the same to be an academic issue. Seen in that light, in absence of any other objection found in the books of accounts of the assessee as may have been pressed before the Tribunal, there survives no room to reject the books of accounts of the assessee. Consequently, there is no intrinsic evidence to enhance the gross profit rate. Once the books of accounts of an assessee are found accepted the Assessing Officer may have remained within the confines of his powers ad not disturbed the gross profit rate as that would remain in the nature of the result of the book entries and not an original entry by itself. Settled principle in this regard being that the assessing officer may never step into the shoes of the assessee to infer more profit than may have been derived by the assessee and further his jurisdiction being confined to examine the correctness and completeness of the books of account, it never became open to the Assessing Officer to reject the gross profit rate disclosed by the assessee. It is also shown, the finding on acceptance of books of accounts of the assessee recorded to by the CIT (Appeals) was not even specifically challenged. Tribunal has not erred in confirming the order of the CIT (Appeals) - Decided against revenue.
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