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2016 (2) TMI 402 - AT - Income TaxRevision u/s 263 - as per CIT(A) AO has not examined the GP result of the assessee - Held that:- As find that in earlier years, the books of account of the assessee were accepted by the AO and so were the trading results. We find in the year under consideration, the assessee has shown GP rate of 7.04% whereas in the previous assessment year it was 6.42%, which has been accepted by the Department. We also find that pursuant to the impugned CIT order, the AO has passed the assessment order in pursuance to the 263 order of the CIT wherein the first direction in respect to verification of four major creditors were carried out and no addition was made by the AO while giving effect to the impugned order of the CIT. The only issue remaining in front of us is whether the rejection of books of account by the CIT can be done by exercising the revisional jurisdiction and make addition of ₹ 7,98,553/-. We find that as earlier stated that the audited books and balance sheet has been already test checked by the AO and found to be in order. Therefore, it cannot be called as a lack of enquiry by the AO. In the previous year’s also, the department has been accepting books of accounts of the assessee, therefore, without pointing out any defect in the books of accounts just because there are certain inflated nature of purchases on account of cash payment cannot be the basis for rejection of books of accounts u/s 145 of the Act and moreover GP rate was more than the previous year. So, we do find merit in the appeal of the assessee and accordingly, the impugned order passed by the ld. CIT is set aside and the assessment order framed by the AO is restored. - Decided in favour of assessee
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