TMI Blog2019 (1) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ower, in our opinion an addition could not have been made. No doubt as held in the case of Goodyear India Ltd [2000 (7) TMI 32 - DELHI HIGH COURT], it is not necessary to accept the books just because an audit u/s.44AB of the Act was conducted. Here the question is not audit conducted u/s.44AB of the Act, the question is whether there were any defects in the books of accounts. AO was unable to find any deficiency in the books produced by the assessee. That apart, we also find that assessee had given a reasonable explanation for the lower gross profit shown by it during the relevant previous year - addition for lower gross profit was not warranted. In our opinion, CIT (Appeals) was justified in deleting such addition - decided against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee engaged in the business of jewellery had filed its return for the impugned assessment year disclosing income of E13,92,73,980/-. An assessment u/s.143(3) of the Income Tax Act, 1961 (in short the Act ) was done on 30.09.2012 accepting income returned by the assessee. Thereafter ld. Commissioner of Income Tax-1, Madurai invoking powers vested on him u/s.263 of the Act set aside the assessment and directed the ld. Assessing Officer to do the assessment afresh, based on the following aspects, which were considered by the ld. CIT as discrepancies in the original assessment. 1.The value of excess stock of 89 kgs of gold has been assessed as against the unaccounted excess stock of 90 kgs gold admitted during the course of surve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) In percentage Gross Profit 1,93,55,870 10.13% 2,65,13,657 32.40% Net Profit -52,58,983 -2.75% 85,36,656 10.43% Turnover 19,10,90,209 8,18,11,838 Though the assessee explained that reduction in profit margin was due to commencement of operation in a new building, recruitment of new staff, stiff competition increase in interest expenditure and increase in selling and advertisement expenditure, these were not considered to be satisfactory by the ld. Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking assessments based on statements recorded during the course of search, seizure and survey. He thus deleted the addition made by the ld. Assessing Officer for the gross profit. 5. Now before us, ld. Departmental Representative strongly assailing the order of the ld. Commissioner of Income Tax (Appeals) submitted that there was a survey conducted in the premises of the assessee on 26.07.2011. As per the ld. Departmental Representative, the Managing Director had promised to offer considerable income for making good the value of unaccounted excess stock and for low profits shown for the previous year relevant to impugned assessment year. However, according to him, assessee had not done so. Just because the books was subject to an aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of accounts or the evidence in support of such books of accounts during the course of assessment proceedings. It is to be noted that original by the assessment was completed u/s.143(3) of the Act on 30.09.2012 accepting the returned income. Impugned assessment was in a second round of proceedings pursuant an order under Section 263 of the Act. In both the rounds, ld. Assessing Officer could not point out any defect in the books of accounts. Just for a reason that gross profit was lower, in our opinion an addition could not have been made. No doubt as held by the Hon ble Delhi High Court in the case of Goodyear India Ltd (supra), it is not necessary to accept the books just because an audit u/s.44AB of the Act was conducted. Here the q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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