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2014 (6) TMI 839 - ITAT DELHIEstimation of income - increase in GP rate - addition in trading results – Rejection of books of accounts – Held that:- The assessee had turnover and had transaction with 252 different parties - the AO rejected the books of account and increased GP rate by 4% - the AO gathered no additional material that could help him recompute the income of the only a small fraction of appellant's gross turnover of Rs.50.3 crores, the effect of difference on confirmation of account results in the appellant having booked lesser expenses in respect of these five parties compared to what was shown on confirmation from them - the very basis of rejection of books of accounts is faulty as circumstances did not require such a drastic measure by disregarding audited books and vouchers - The AO has not given details of the manner in which any income was not booked or any expenses were over booked - the action of the AO in making the best judgement assessment, thereby increasing the GP of the assessee by 4% was based on incorrect appreciation of the facts, on insufficient facts to reject the books, suffers from lack of natural justice to the assessee u/s 144 - the expenses were clearly in the nature of prior period expenses and need to be disallowed in making the computation of income for the current year - CIT(A) has dealt with the entire issue and has rightly decided the issue in favour of the assessee and there was no infirmity in the order – Decided against Revenue.
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