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2016 (3) TMI 364 - ITAT CHENNAI

2016 (3) TMI 364 - ITAT CHENNAI - TMI - Estimation of profits - rejection of books of accounts - Held that:- When there was no error or mistake pointed out by the Assessing Officer in respect of other businesses, rejection of the entire books of account is not justified. Even with regard to trading in bullion, the assessee-company purchased gold bullion to the extent of ₹ 1,85,34,411/- from M/s Gajaanand Jewellery Mart Pvt. Ltd, Coimbatore. The ledger account appearing in the books of acco .....

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ance for the year under consideration, then naturally the sale of such bullion has to be reflected in the ledger account of the assessee-company. In those circumstances, by considering the profit ratio of the assessee, this Tribunal is of the considered opinion that rejection of books of account is not justified. Merely because there was an error in the annual report, as rightly submitted by the ld. Counsel for the assessee, this will not have any impact on the profit of the assessee. When the a .....

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the Respondent : Shri A V Sreekanth, JCIT ORDER Per NRS Ganesan, Judicial Member This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-1, Coimbatore, dated 17.3.2015 and pertains to assessment year 2011-12. 2. Shri T.Vasudevan, ld. Counsel for the assessee submitted that the assessee-company is engaged in various businesses including trading in bullion. During the course of assessment, the Assessing Officer found certain clerical errors in the annu .....

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ssee. According to the ld. Counsel, the Assessing Officer estimated the net profit at 2% in the business of bullion trading and all other businesses at 4%. On appeal by the assessee, the CIT(A), after considering the nature of business of the assessee, estimated the profit from bullion trading at 1%, gold ornaments at 1.30%. Similarly, profit from windmill was estimated at 44.34%, profit from textile business was estimated at 3.5% and profit from silver business was estimated at 1.5%. According .....

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sales of bullion were also recorded in the books of account. Since there was no difference in the purchase and sales of bullion in the books of account of the assessee, there is no justification for rejecting the books of account merely because there was a difference in the books of account of the purchaser namely, M/s Gajaanand Jewellery Mart Pvt. Ltd, Coimbatore. The ld. Counsel further submitted that the difference in purchase account was due to a clerical mistake on the part of the accounta .....

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er after examining the ledger account appearing in the books of account of the assessee-company, found that M/s Gajaanand Jewellery Mart Pvt. Ltd has sold gold bullion to the extent of ₹ 2,23,39,087/-. Since there was a difference with regard to purchase of gold bullion from M/s Gajaanand Jewellery Mart Pvt. Ltd, Coimbatore, the Assessing Officer found that there was a possibility of change in the profitability. Accordingly, the Assessing Officer estimated the profit in bullion trading at .....

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so perused the material available on record. The assessee engaged itself in diversified business in sale of bullion, jewellery, textile, silver and generation of power through windmill. In respect of the business from gold jewellery, silver, textile and windmill no error/mistake was found by the Assessing Officer. The only mistake pointed out by the Assessing Officer is with regard to purchase of gold bullion. Therefore, this Tribunal is of the considered opinion that when there was no error or .....

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