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2010 (4) TMI 84 - 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 earlier years gross profit ratio - The Assessing Officer rejected the Books of Account produced by the assessee and computed income of the assessee, taking the gross profit ratio at 17.58%, which was the gross profit percentage declared for the A.Y.2002-2003. Addition of Rs.24,40,898/- was, accordingly, made by the Assessing Officer - Assessing Officer had not found any defect in the books of accounts maintained by the assessee. The Tribunal was of the view that maintenance of Stock Register, which shows consumption of raw material and production of finished goods by applying the same measurement was not feasible, considering the nature of the business of the assessee. It was further noted that the fabric was measured in metres and was thereafter stitched to make garments which have to be counted in pieces. The Tribunal also pointed out that the Assessing Officer had not been able to point out any difference in the consumption of raw material and production of finished goods, when compared to the earlier years. The Tribunal, therefore, concluded that the finding recorded by Commissioner of Income Tax (Appeals) was on the right footing. – held that - Assessing Officer for deviating from this accepted principle of assessment. - In any case, the question whether fall in gross profit stood explained by the assessee or not is a question of fact. Both, the ITAT as well as CIT (Appeals) have accepted the explanation given by the assessee. This Court cannot disturb finding of fact unless some perversity is pointed out in the finding of the Tribunal which is otherwise the final authority on facts. – decided in favor of assessee
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