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2017 (6) TMI 723 - ITAT CHANDIGARHAddition on account of fall in GP - rejection of books of account of the assessee - Held that:- A perusal of the assessment order reveals that all discrepancies and incriminating material found during search in relation to stock, cash and debtors, was duly explained to the satisfaction of the assessing officer, who has categorically stated so in his order. The surrender made under various heads, we find, was only to buy peace. We are in agreement with the CIT (Appeals) that since complete records were maintained by the assessee and all defects pointed out by the Assessing Officer were duly explained by the assessee and further no specific defects in the books of account were pointed out by the Assessing Officer, the rejection of books of account was not acceptable more so, solely on the basis of fall in GP rate. We also find that the GP rate had increased in the current year from ₹ 411.64 lacs in the preceding year to 499.55 lacs in the impugned year. It is also admitted fact that the assessee had surrendered additional income during the course of search amounting to ₹ 160 lacs which included ₹ 145 lacs on account of difference in stock and unrealized sales/debtors. Undoubtedly the assessee’s surrender on these counts, which form part of GP, is much more than that being made by the AO and for this reason also there is no justification for making any addition on account of fall in GP. No infirmity in the order of the learned CIT (Appeals) in holding the rejection of books of account by the Assessing Officer as unjustified and deleting the resultant addition by applying GP rate of 16%. - Decided against revenue.
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