TMI Blog2018 (9) TMI 1307X X X X Extracts X X X X X X X X Extracts X X X X ..... case to reject the books of accounts. Ground No.1 of the assessee’s appeal is dismissed. Profit estimation - adoption of gross profit on the basis of past history - Held that:- CIT(A) has adopted the profit on the basis of past history of the assessee. The only contention of the assessee in the present year is that gross turnover of the assessee has increased, therefore, the profit cannot be estimated merely on the basis of the past history. We are unable to accept the submissions of the assessee as the Ld. CIT(A) has rightly adopted the gross profit on the basis of past history and the impact of not taking into account the expenses related to freight and cartage. This ground of appeal of the assessee is also dismissed. - ITA No.145 & 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iating the facts of the case and submission made before him. 3. The appellant reserve its right to add, alter or delete any ground of appeal on or before the date of final hearing. 5. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as the Act ) was framed vide order dated 14.12.2012. During the assessment proceedings, the A.O. noticed that the expenses related to cartage and freight are not included in the closing stock by the assessee. Therefore, the assessing officer rejected the books of accounts on this basis and estimated the net profit @ 5% and 8% respectively, thereby he made addition of ₹ 42,78,108/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record and gone through the orders of the authorities below. There is no dispute with regard to the fact that the A.O. would be within his power to reject books of accounts, if he is satisfied that the books of accounts placed before him do not give the correct figure of the profit. In the present case, admittedly, the assessee has not included expenses related to the cartage and freight in his books of accounts, by this it has distorted the correct figure of profit. Therefore, in our view, the assessing officer was justified in the present case to reject the books of accounts. Ground No.1 of the assessee s appeal is dismissed. 8. Ground No.2 is against sustaining the addition of ₹ 17,13,476/-. Ld. Counsel for the assessee submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit in the year under consideration and there is a marginal rise in the net profit. The fall in gross profit is partly attributable to the fact that the turnover has gone up from ₹ 2.69 crores to ₹ 11.10 crores and gross receipts of job work have gone up from ₹ 76.45 lacs to ₹ 4.06 crores. The average gross profit for the above 4 years comes to 8.87% as against gross profit of 7.48% for the year under considerationi i.e. a difference of 1.39%. Considering all the facts of the case it would be reasonable to estimate the additional net profit at 1.13% (0.87% + 1.39%/2) of the total turnover and gross receipts of ₹ 151635080/- which works out to ₹ 1713476/-. The addition is therefore confirmed to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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