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2015 (7) TMI 698 - AT - Income TaxRejection of books of accounts - adoption of GP rate of 20% - Since the assessee has already offered GP rate of 13.60% during the year under consideration the balance 6.4% on turnover of which comes to ₹ 55,08,898/- was treated by him as suppressed profit of the impugned assessment year - Held that:- From the comparison of the profit and loss account for A.Y. 2008-09 and A.Y. 2009-10, we find the material consumption was 36.79% during the current year as against 28.89% in the preceding year. Similarly, as against ₹ 3,67,898/- incurred towards royalty charges in the preceding assessment year the assessee has incurred ₹ 23,43,403/- towards royalty charge during the impugned assessment year. The royalty charges has been paid to Government, thus, there is almost an increase of about ₹ 20 lakhs in the royalty payment. Further, we find merit in the submission of the Ld. Counsel for the assessee that the profit from sub-contract work will be less since the main contractor retains a part of the profit. Therefore, as against 17.96% profit from own contract work, the assessee has earned 10.38% from sub contract work and therefore profit from sub contract work cannot be at par with profit from contract work. The Hon'ble Bombay High Court in the case of R.B. Jessaram Fatechand (1969 (7) TMI 10 - BOMBAY High Court ) has held that in the case of cash transaction where delivery of goods is taken against payment, it is hardly necessary for the seller to bother about the name and address of the purchaser. The account books of an assessee cannot therefore be rejected merely on the ground that the particulars of the assessee are not mentioned in the case of cash transactions. The Hon'ble Punjab & Haryana High Court in the case of Om Overseas (2008 (3) TMI 44 - HIGH COURT PUNJAB AND HARYANA a) has held that in absence of any specific defects pointed out in the books of account, the book results cannot be rejected merely on the ground that there is fall in profit ratio. Since in the instant case, we have already held that the defects as pointed out by the Assessing Officer are trivial in nature which do not call for rejection of the book results, therefore, consideration the totality of the facts of the case and in view of our discussion in the foregoing paragraphs, we are of the considered opinion that the rejection of books of account in the instant case is not justified. We therefore hold that the income returned by the assessee has to be accepted. - Decided in favour of assessee.
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