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2016 (7) TMI 674 - BOMBAY HIGH COURT

2016 (7) TMI 674 - BOMBAY HIGH COURT - TMI - Rejection of books of accounts - valuation of gross profit ratio - Held that:- The submission of revenue that the rejection of books of accounts under Section 145(3) of the Act by the Assessing Officer was justified as there was discrepancy in valuation of closing stock of work in progress is not sustainable. This for the reason that the CIT(A) had in his order deleted the addition made on the above account and the Revenue has accepted it. This is evi .....

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shows that it found as a fact that the accounts were correct and complete. In fact, even quantitative details were also mentioned. As the finding of the Tribunal in the impugned order is shown to be perverse or arbitrary, it does not call for any interference. - Decided against revenue - Income Tax Appeal No. 2427 of 2013 - Dated:- 20-6-2016 - M. S. Sanklecha And A. K. Menon, JJ. Mr. Arvind Pinto for the appellant Ms. Asifa Khan for the respondent ORDER P. C. 1. This Appeal under Section 260A o .....

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nt assessee is in the business of manufacture of cranes. In his return of income, the respondent assessee declared income of ₹ 74.46 lakhs. During the assessment proceedings the Assessing Officer found discrepancy in the valuation of closing stock and fall in the gross profit ratio from 10% to 7.83%. This led to Assessing Officer rejecting the books of accounts under Section 145(3) of the Act. This led to an addition on account of valuation of work in progress at ₹ 1 crore and furthe .....

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ejection of books of accounts records a finding that the Assessing Officer has not produced any evidence to show any defects in maintaining the books of accounts on the part of the Assessee. In fact, it renders a finding that each and every detail has been kept by the assessee. Quantitative details of the opening as well as the closing stock are also maintained. It observes that the Assessing Officer and the CIT(A) have nowhere indicated any defect with regard to the purchase account, sales acco .....

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eased competition resulting in prices of its final product be stagnant coupled with increase in cost of purchases. 7. The grievance of the Revenue before us is that the impugned order ought to have upheld the rejection of respondent assessee's books of accounts done by the Assessing Officer under Section 145(3) of the Act and confirmed by the CIT(A). In support, Mr. Pinto, the learned Counsel for the Revenue states that during the assessment proceedings, a discrepancy in valuation of the Clo .....

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