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2016 (8) TMI 776 - GUJARAT HIGH COURTRejection of book result - estimation of sale and G.P - Held that:- The books of accounts of the assessee were periodically checked by the revenue authorities. It appears that in the subsequent year i.e. in assessment year 199596, the same G.P. rate has been accepted by the Department. It is a fact that the cost of raw materials has increased. It is also seen that 100% goods are sold to its sister concern and therefore the question of GP does not arise. The A.O. could not find that the assessee had sold finished goods at a lesser price to its sister concern. In our opinion, low profits and absence of regular stock register are not sufficient reasons for rejection of the accounts of assessee. Hence, the CIT (A) and Tribunal were justified in deleting the addition. Both the authorities below have considered the materials placed before them and we see no reason to interfere with the same. - Decided in favour of assessee Disallowance u/s.40A(2)(b) being paid by the assessee to the Excise Department on behalf of its sister concern - Held that:- The assessee company exclusively marketed its product through its sister concerns namely Babul Marketing and Babul Agencies. Accordingly assessee company collected excise duty and paid the same to the Central Excise Department as against the collected dues from these parties. The excess payment was made. The assessee route collection and payment of excise duty through its trading and profit and account. In this view of the situation, we find that there is no infirmity in the decision of CIT (A) vide which such disallowance has been deleted as the present addition is not falling within the ambit of section 40(A) (2)(b)
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