9911796707
|
Home
Issues involved: Appeal against the order of CIT(A)-Jalpaiguri confirming Gross Profit rate based on previous three years u/s 143(3) of the Income Tax Act, 1961 for Assessment Year 2003-04.
Summary: Issue 1: Confirmation of Gross Profit rate based on previous three years The assessee appealed against the CIT(A)'s decision to confirm the addition of alleged sales of suppressed tea production by applying the average production rate of preceding 3 years. The assessee argued that there were no defects in the audited books of account and the production was accepted by Excise and sales Tax authorities. The CIT(A) also erred in confirming the addition of alleged extra production/sales of suppressed tea despite the explanation filed by the assessee and the Auditor's Report confirming no defects in the books of account. The Tribunal noted that the Assessing Officer did not reject the books of accounts and the CIT(A) did not address this issue either. The Tribunal held that the first proviso to section 145(1) or section 145(2) can only be invoked if the elements attracting those provisions exist, and a clear finding along with supporting material must be provided by the Assessing Officer before estimating the Gross Profit rate without rejecting the books of account. Since there was no finding or rejection of books of account in this case, the Tribunal concluded that the lower authorities erred in applying the gross profit rate based on earlier years. Therefore, the Tribunal allowed the claim of the assessee and allowed the appeal. In conclusion, the appeal of the assessee was allowed by the Tribunal, and the order was pronounced in open court on 11th March 2011.
|
