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2023 (9) TMI 1216 - ITAT JAIPURGP estimation - non rejection of books of accounts - AO merely based on the comparison of previous year profit considered this year profit @ 4% - HELD THAT:- As assessee has filed the detailed explanation for the difference in GP by submission dated 20.04.2022 and 08.08.2022 the same is neither discussed by the ld. AO nor by the ld. CIT(A) while dealing with the facts of the case. The books of accounts of the assessee is duly audited by an independent chartered accountant. The assessee in detailed explained the reason behind the fall in the profit rate. Even the quantitative details of the opening stock, purchases, sales and closing stock were given and the same is not disputed by the lower authorities. In spite of all these details placed on record and without finding fault on the record the action of the AO estimating the profit rate @ 4% and that too without rejecting the books of account is not in accordance with the law. Even the ld. CIT(A) has not given any finding on the merits of the case. For estimating the profit without rejecting the books the jurisdictional high court in the case of CIT Vs. Maharaja Shree Umaid Mills Ltd. [1991 (5) TMI 46 - RAJASTHAN HIGH COURT] as held that question about the fall in gross profit rate cannot be looked into in this case because the Inspecting Assistant Commissioner has not rejected the books of accounts of the assessee and without making this as a base, it could not be said that the expenditure had been inflated, which is a question of fact and in view of the finding of the Commissioner which is confirmed by the tribunal, the same cannot be allowed. Assessee appeal allowed.
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