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2010 (4) TMI 83 - HC - Income TaxBest Judgment assessment - Rejection of books of accounts u/s 145(3) – drop in gross profit – determination of gross profit on the basis of previous year’s figure - The drop in gross profit ratio was attributed to increase in fabric consumption, increase in processing cost such as fabrication, embroidery, dyeing and bleaching and comparatively low increase in the average sale price. The Assessing Officer rejected the accounts under Section 145(3) of Income Tax Act and computed the gross profit at the estimated rate of 28%, considering that the gross profit declared in the immediate preceding year was 27% and made addition accordingly - held that - In any case, the question whether the accounts maintained by the assessee were defective and/or incomplete, or not, was a question of fact. Neither the CIT(A) nor the ITAT found the accounts to be defective or incomplete. Both, CIT(A) as well as the Tribunal were satisfied with the Stock Register maintained by the assessee and appreciated the fact the raw material, i.e., the fabric purchased by the assessee was to be measured in metres, whereas the finished products were to be counted in numbers. No reasonable ground has been made out for this Court to go in to this question and revisit the finding returned by the CIT(A) and the ITAT. - It is not as if the assessee did not give any plausible explanation for the fall in gross profit during year in question. He gave a number of reasons in this regard and the explanation given by the assessee having been accepted by the CIT(A) as well as by the Tribunal, it is not for this Court to go into such a question of fact. – decided in favor of assessee
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