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2013 (11) TMI 1264 - ITAT PUNEDeletion of Low GP – Non-Acceptance of Gross Profit Ratio – The Assessing Officer rejected the book results on the ground that the GP rate was ridiculously low as compared to the results of the preceding two years - Held that:- There was no finding by the AO that the finished product was sold by the assessee at a price higher than what was declared in the account books - the CIT (A) and the Tribunal were justified in holding that the AO could not have increased the GP ratio merely because it was low as compared to the GP ratio of the preceding year – Relying upon COMMISSIONER OF INCOME TAX-XII Versus SMT. POONAM RANI [2010 (5) TMI 57 - HIGH COURT OF DELHI] and CIT Vs. K.S. Bhatia[ 2002 (9) TMI 8 - PUNJAB AND HARYANA High Court ] - The fall in GP ratio, in the absence of any cogent reasons, could not by itself, have been a ground to hold that proper income of the assessee cannot be deduced from the accounts maintained by her and consequently, could not have been a ground to reject the accounts invoking s. 145(3). Non maintenance of Stock Register – Held that:- No stock register was maintained by the assessee he had maintained monthly sales and purchase of gold ornaments giving opening stock in value as well as in quantity and purchase in value as well as in quantity - The assessee had maintained sales and purchase bills which were fully vouched and no discrepancy was found either by the survey party or by the Assessing Officer – Assessee’s trading account was fully supported by quantitative account had not been controverted by the Revenue - Assessing Officer had found no other discrepancy in the books of account except non-maintenance of stock register - it purchases only old ornaments and after remaking them sells the same - the estimate of sales of Rs.20,000 per day by taking 300 days in the year as the working days of the assessee firm and estimation of GP rate @25% of the turnover was purely on the basis of surmises and conjectures and therefore should not be accepted – Decided against Revenue.
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