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2020 (5) TMI 186 - AT - Income TaxRejection of books of accounts - GP Estimation - HELD THAT:- After rejection of book results, the rate of gross profit could be determined by considering the gross profit level declared by comparable cases. While we agree with the view of the CIT(A) that the profit should have been estimated at “Gross profit level”, we notice that the CIT(A) has not brought any comparable cases to determine the Gross profit rate at 4.50% in both the years. There is fallacy in the approach of the CIT(A) which cannot be upheld. We also notice that there was no occasion for the assessing officer to examine various expenses claimed by the assessee, since he had estimated the net profit. We are of the view that matters relating to estimation of gross profit rate by considering comparable cases and examination of various expenses claimed by the assessee require fresh examination at the end of the assessing officer. Accordingly, we set aside the orders passed by CIT(A) in both the years and restore the issues relating to estimation of gross profit rate and examination of various expenses claimed by the assessee in both the years to the file of the assessing officer, who shall examine them in accordance with law after affording adequate opportunity of being heard to the assessee.
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