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2018 (9) TMI 1684 - AT - Income TaxRejection of books of accounts - profit estimation - rejecting books of account and thereafter applying a G.P. rate of 16.54% to the turnover is not upheld by CIT-A - Held that:- CIT(A) has correctly observed that GP rate cannot be static year after year and it is impacted by various economic factors and market conditions which admittedly are beyond the control of an individual taxpayer. Similarly, he has taken note of the fact that the records regularly maintained under the Excise Law cannot be ignored as these are relevant for Income Tax purposes also and in fact are complimentary to the income tax proceedings as these justify the production aspect with regard to the manufacturing quality, sizes, quantum of finished goods, raw material and other consumables on a day-to-day basis. In the face of the complete quantitative information in connection with purchases, production and sales details available to the AO who has not pointed out any defect with evidence in the audited books of accounts and there is no such finding of fact that the assessee has inflated the cost of raw material or cost of manufacturing or suppressed its sale prices order, or that it has made purchases of raw material or sale of finished goods outside the books. Since the quantum of production and turnover has been accepted, the rejection of books of accounts in the peculiar facts and circumstances has been held to be inapplicable and we find no good reason available on record on the basis of which the said conclusion can be varied. - Decided against revenue
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