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2016 (3) TMI 364 - AT - Income TaxEstimation of profits - rejection of books of accounts - Held that:- When there was no error or mistake pointed out by the Assessing Officer in respect of other businesses, rejection of the entire books of account is not justified. Even with regard to trading in bullion, the assessee-company purchased gold bullion to the extent of ₹ 1,85,34,411/- from M/s Gajaanand Jewellery Mart Pvt. Ltd, Coimbatore. The ledger account appearing in the books of account of the assessee shows sale of ₹ 2,23,39,087/-. The Assessing Officer has not considered the opening balance of the bullion for the year under consideration. The Assessing Officer has not considered the profit on sale of the bullion. When the assessee purchased bullion to the extent of ₹ 1,85,34,411/-, the sale consideration on sale of bullion would be more than ₹ 1,85,34,411/-. If there is a stock of gold bullion in the earlier assessment year which was taken as opening balance for the year under consideration, then naturally the sale of such bullion has to be reflected in the ledger account of the assessee-company. In those circumstances, by considering the profit ratio of the assessee, this Tribunal is of the considered opinion that rejection of books of account is not justified. Merely because there was an error in the annual report, as rightly submitted by the ld. Counsel for the assessee, this will not have any impact on the profit of the assessee. When the assessee has recorded the entire purchases and sales of the bullion in the books of account, this Tribunal is of the considered opinion that estimating profit after rejecting the books of account is not justified. Accordingly, the orders of the lower authorities are set aside and the addition made by the Assessing Officer is deleted. - Decided in favour of assessee
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