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2023 (1) TMI 34 - AT - Income TaxGP estimation - rejection of books of account - no stock register, goods inward register, goods outward register is being maintained by the Assessee on regular basis - HELD THAT:- We fail to understand, once the Assessee having stock of raw-material then how the stock register of manufactured goods is not necessary. Further, the Assessee tried to shift the onus upon the Supervisor, whereas it is a fact that Supervisor is working for the benefit of the Assessee firm only and, therefore, the Assessee is not justified in not maintaining the stock register of the finished items/ gold jewellery. Assessee also failed to controvert the findings of both the authorities below with regard conclusion drawn and rejection of its books of account on the pretext that Assessee would have sale transactions over crores of rupees with parties in International market without a single record of orders placed, the terms and conditions of payment, date of delivery and rate of such sale/purchase. Books of account are neither complete nor reliable since no stock register, goods inward register, goods outward register is being maintained by the Assessee on regular basis. Hence, we are inclined not to interfere in the rejection of books of account. Coming to the application of GP rate @ 3% on sales by the Assessing Officer and affirmation thereof by the learned Commissioner, we observe that the AO has taken into consideration the prevailing GP rate amongst similar jewellery exporters who have declared GP rate @ 4-8% in the vicinity and, therefore, application of GP rate @ 3% on sales as reasonable and appropriate. AO has no where mentioned details of similar jewellery exporters and has remarked qua the prevailing GP rate in general and, therefore, the same is un-sustainable. Considering the peculiar facts and circumstances of the case and past history of the GP and NP declared by the Assessee, in our considered view, as agreed the parties too, justice would be met by directing the AO to apply the GP rate @ 2.5% as declared by the Assessee in immediately preceding assessment year, as justified and reasonable, hence order accordingly. Consequently, the appeal filed by the Assessee is liable to be allowed partly.
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