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2015 (9) TMI 841 - ITAT AHMEDABADRejection of books of accounts - as per AO the assessee had failed to maintain quality-wise data of diamond manufactured and to furnish the relevant production record - CIT(A) reversed AO order - Held that:- There is no dispute that assessee’s books of account pertaining to its diamond stock are being maintained on “carat basis”. This method is consistently followed in preceding and succeeding assessment years. The case file contains details of quality-wise closing stock as on 31st March, 2007, audit report as well as sample copy of stock register for March 2007 relating to the relevant previous year. The Revenue fails to controvert correctness thereof except making oral submissions. The above stated consistency of past practice in maintaining books and stock caratwise is not rebutted. There is no other material quoted so as to reject assessee’s books of account. We uphold the CIT(A)’s order in these facts and hold that the same does not call for any interference. - Decided against revenue. Addition made after estimation of gross profit - Held that:- It is admitted that assessee’s gross profit from assessment year 2004-05 to the impugned assessment year 2007-08 reads 9.67%, 5.04%, 6% and 3.96%; respectively. The assessee attributed this fall to increase in turn over along with decline in export and local rates @ ₹ 1,251/- and ₹ 3,406/- respectively. The Assessing Officer neither disputes this rate fluctuation specifically nor does he draw any comparable instance to re-estimate the impugned gross profit. Be that as it may, the fact also remains that the very basis of this estimation is rejection of assessee’s books of account which already stands decided against the Revenue. It also fails to quote any evidence much less is specific one citing appropriate comparable instances in the course of hearing. We uphold the lower appellate findings accordingly.- Decided against revenue. Fall in diamond yield by 1.28% resulting in addition to income - CIT(A) deleted addition - Held that:- once the assessee’s book result already stands accepted in preceding paragraph, this issue is rendered academic. We further notice that the very yield in assessment year 2005-06 was 26.93% much less than 30.35% in assessment year 2004-05. This year comprises of yield rate @ 27.63% ie. much more than that in assessment year 2005-06. The Assessing Officer does not seem to have made addition on account of yield fluctuation attributable to peculiarities of the assessee’s business. Nor is any specific material pin pointing defecting the yield rate in question is being cited. We accordingly hold that the CIT(A) has rightly reversed the Assessing Officer’s findings under challenged. - Decided against revenue.
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