Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2018 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (3) TMI 225 - HC - Income TaxJustification for rejection of books of accounts - Assessee has sold goods at price lower than its purchase price - estimation of profit - Held that:- It is not the case of the Revenue that the amounts reflected as sale price and/or purchase price in the books do not correctly reflect the sale and/or purchase prices. In terms of Section 145(3) AO is entitled to reject the books of accounts only on any of the following condition being satisfied. (i) Whether he is not satisfied about the correctness or completeness of accounts; or (ii) Whether the method of accounting has not been regularly followed by the Assessee; or (iii) The income has been determined not in accordance with notified income and disclosure standard. It is not the case of the Revenue that any of the above circumstances specified in Section 145(3) of the Act are satisfied. The rejection of accounts is justified on the basis that it is not possible for the Assessee who is a trader to sell goods at the prices lower than the market price or purchase price. In fact as observed by the Apex Court Commissioner of Income Tax, Gujarat Vs. A. Raman & Co. (1967 (7) TMI 2 - SUPREME Court) and in S.A. Builders Vs. Commissioner of Income Tax [2006 (12) TMI 82 - SUPREME COURT] the law does not oblige/compel a trader to make maximize its profits. - Decided against revenue
|