TMI Blog2015 (3) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to file confirmed copies of accounts which could have changed his mind regarding his action to reject the books of account. Therefore, Ld. CIT(A) held that AO was erred in rejecting the books of account of the assessee and estimating profits of the assessee. Hence, he deleted the addition made by the AO. In view of the above, we find that Ld. CIT(A) has rightly deleted the addition ₹ 22,85,157/- which does not need any interference on our part, hence, the same is upheld. - Decided in favour of assessee. - I.T.A. No. 4503/Del/2013 - - - Dated:- 9-1-2015 - SHRI S.V. MEHROTRA AND SHRI H.S. SIDHU, JJ. For The Department : Sh. Vikram Sahay, Sr. D.R. For The Assessee : S h. Vinod Arora, CA ORDER PER H.S. SIDHU : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e I.T. Act, 1961 on 17.3.2010 at the returned income. The case was selected under compulsory scrutiny through CASS. Statutory notice u/s. 143(2) of the I.T. Act, 1961 was issued on 12.8.2009, which was duly served upon the assessee. Notice u/s. 142(1) alongwith detailed questionnaire was issued on 17.8.2010, which was duly served upon the assessee. The jurisdiction over the case was assigned to the office of the Addl. CIT, Gurgaon Range-II, Gurgaon. Requisite information called for have been furnished, examined and verified and placed on records. On going through the records, Ld. AO observed that debtors shown by the assessee are bogus and fictitious. Hence, the books of accounts of the assesee are not reliable and the same are defective. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 20,88,624/- whereas in the preceding assessment year the commission income had not been credited in the trading account and was shown separately in the profit and loss account. The AO, therefore, reduced commission income in the current year, which resulted in GP going down to (-) 0.02%. On the basis of these calculations, the AO concluded that there was a fall in GP rate by 0.62% during the year as compared to the immediately preceding assessment year. Since the assessee was not able to produce confirmations, the AO rejected the books u/s. 145 of the Income Tax Act and estimated the GP rate @1% resulting in an addition of ₹ 22,85,157/-. We also find that Ld. CIT(A) sent the additional evidence submitted by the assessee to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of rechargeables. We find that Ld. CIT(A) has observed that the GP rate in case of purchase /sale of handsets and that in any purchase /sale of rechargeables for the period relevant to the assessment year 2007-08 and asstt. year 2008-09 is as under:- GP Rate 2008-09 2007-08 Handsets .62% .62% Rechargeables .94% .84% Thus, if the same accounting treatment is given to the business of purchase / sale of rechargeable in both the years, the GP rate during the year under consideration turns out to be higher than in the immediately preceding year. Ld. CIT(A) observed that the argument of the AO that the GP rate has fallen in the year under consideration compared to the immediately preceding year is bereft of any force and logic. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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