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ACIT Versus Pasondia Steels Profiles Ltd.

Rejection of books of accounts - Estimation of income - Held that:- Assessee did not produce proper books of account and other relevant details in support of the expenses, etc., claimed. The same position continued even before the learned first appellate authority inasmuch as the assessee admitted that it was not possible to do so because of the closure of its business and the case being before BIFR - rejection of books of account by the authorities below is upheld.

Determination of t .....

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ross profit rate. If there had not been this salient feature in this year, we would have gone by the earlier year’s gross profit rate. But this is a relevant factor justifying the reduction in profit. In our considered opinion, the ld. CIT(A) was justified in ordering the application of 4% GP rate in contrast to 7.18% applied by the AO

Auditor of the assessee pointed out the referred irregularities in the payment of statutory liabilities, which called for disallowance, if any, under s .....

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ITA No.2694/Del/2013 - Dated:- 10-3-2015 - Shri R.S. Syal And Shri A.T. Varkey JJ. For the Appellant : None For the Respondent : Shri Vikram Sahay, Sr. DR ORDER Per R.S. Syal, AM: This appeal by the Revenue is directed against the order passed by the CIT(A) on 19.2.2013 in relation to the assessment year 2007-08. 2. The first three grounds are against the deletion of addition to the tune of ₹ 93,01,676/-. 3. Briefly stated, the facts of the case are that the assessee was engaged in the bus .....

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required verification. It was also seen that there was no confirmation of accounts of certain parties, such as, Prashad Iron Traders, to whom case cash payment of ₹ 5 lac was made; KPS Steels, a debtor, from whom large amount of cash was received; Krishna Steel Traders, to whom huge amount of cash was paid. In view of the above discrepancies and non-production of accounts, the AO opined that the assessee was not in a position to substantiate its sales, expenses and other relevant details. .....

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ld. CIT(A) upheld the action of the AO in rejecting the books of account because despite specific opportunities even given by the ld.CIT(A) to produce books of account and creditors before the AO, the assessee admitted that these records were not easily available because the company had closed its business and was in BIFR. Considering all the facts, the ld. CIT(A) directed to apply 4% GP rate which resulted into the aforesaid relief, against which the Revenue has come up in appeal before us. 4. .....

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nasmuch as the assessee admitted that it was not possible to do so because of the closure of its business and the case being before BIFR. Under such circumstances, we uphold the rejection of books of account by the authorities below. 5. The next issue is about the determination of the gross profit rate to be applied after rejecting the books of account. Ordinarily, the gross profit rate of the immediately preceding year constitutes a good guide for adoption in the succeeding year. If, however, t .....

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he period relevant to the assessment year under consideration. The fact that the assessee was declared as a sick company in this year alone strengthens the view point of the ld. CIT(A) for justifying the departure from the preceding year s gross profit rate. If there had not been this salient feature in this year, we would have gone by the earlier year s gross profit rate. But this is a relevant factor justifying the reduction in profit. In our considered opinion, the ld. CIT(A) was justified in .....

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