Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (5) TMI 721 - AT - Income TaxRejection of books of accounts - Held that:- As from the assessment order that it is not the case of the Assessing Officer that the respondent assessee failed to produce the information called for, nor is it the case that the books of account are defective. The Assessing Officer failed to give any specific reason for rejection of book results. It appears that the sole basis for rejection of book results is the assessment order of the immediate preceding year i.e. 2008-09 in which the books of account have been rejected by the Assessing Officer. This Tribunal in the assessee’s own case for the assessment year 2008-09, rejected this ground of appeal raised by the Revenue, which reads that in the Remand Report the contentions of the assessee that the AO was not justified in rejecting the books of accounts was accepted by the A.O. The A.O. also accepted the contention that he has not been able to point out any discrepancy in the books of account and stock record produced by the assessee before him. Thus, in our view, the First Appellant Authority had no other option but to reject the action of AO in rejecting the books of accounts. Decided against revenue. Addition on account of generation of scrap - CIT(A) deleted the addition - Held that:- the claim for generation of Scrap as per the Books of Account is significantly lower, not just for items at S. No. 4 and 5 i.e. 'Knife' and 'Pasta/Noodle-SM', as mentioned in Para 8.10 above, but also in case of the item at S. No. 3, i.e. 'Table Fork', for which the Assessee claims that the actual figure of generation of Scrap as per Books was 49.576% and not 54.99% as shown the Assessment Order, as against the Departmental figure of Scrap generation of 51.93%. In such a situation, it is seen that the Departmental figure for Scrap generation would be significantly higher than the Assessee's claim for 3 items and lower for 2 items. In any case, no conclusion can be drawn from the Inspector's Report regarding inflation of claimed Scrap generation as no trend for inflation of Scrap is seen from the Inspector's Report and though there are variations between the Inspector's Report and the claim of the Assessee but no definite conclusion of inflation or suppression can be suppression can be drawn when for 3 items a different trend is seen and for the other 2 items a different trend is seen.In any case, it is seen that the Inspector's Report cannot lead to any conclusion that the generation of Scrap was shown by the Assessee at any inflated figures - Decided in favour of assesse. Addition on account of closing stock - Held that:- The learned CIT(A) has taken G.P. rate at 4.63% while valuing the cost of the finished goods. The learned CIT(A) ignored the fact that by the addition of AY: 2009-10 ₹ 1,23,22,100/- the gross profit increases to ₹ 2,79,56,800/- and consequently the G.P. rate will be 8.28% not 4.63% applied by him. The assessee has disclosed the G.P. rate at 14.93%. It is settled principle of law that the closing stock should be valued at lower cost of sale price. As submitted by the respondent assessee, the cost should be arrived at after deletion of addition made in respect of sale of scrap. Accordingly, the cross objections are allowed.- Decided in favour of assesse.
|