9911796707
|
Home
Issues involved: Appeal against the order dated 18.03.2011 passed by the ld. CIT(A) for the A.Y. 2006-07 regarding the addition of Rs. 10,28,239/- u/s 143(2) based on gross profit rate discrepancy.
Summary: Issue 1: Gross Profit Rate Discrepancy The assessee, engaged in food grains business, declared a gross profit rate of 6.47% for the year, lower than the previous year's 9.13%. The AO made an addition of Rs. 10,28,239/- by adopting a gross profit rate of 7% instead. The ld. CIT(A) deleted the addition citing lack of evidence supporting the decline in gross profit rate and referencing legal precedents emphasizing the need to reject books of accounts for such adjustments. The Hon'ble ITAT Delhi and other cases highlighted the importance of specific defects in accounts before disturbing declared results. The Delhi High Court also emphasized the need for factual evidence to reject accounts based on profit rate alone. Issue 2: Appeal and Decision The department appealed the decision, arguing for the 7% gross profit rate based on past history. The assessee's counsel contended that no defects were pointed out in the maintained accounts, which were audited and accurate. The Tribunal upheld the ld. CIT(A)'s decision, noting the lack of basis for the AO's 7% rate adoption and subsequent addition. The Tribunal agreed that the addition based on assumed profit rates was unjustified without concrete evidence of account falsehood. In conclusion, the Tribunal dismissed the revenue's appeal, upholding the deletion of the Rs. 10,28,239/- addition on account of gross profit. The decision was pronounced on 15.12.2011 after due consideration of all arguments and legal precedents.
|
