2016 (6) TMI 1041 - HC - Income Tax

Addition on account of low gross profit - Held that - As decided in assessee s own case for the assessment year 2001-2002 2015 (1) TMI 615 - GUJARAT HIGH COURT there were no discrepancies or defects pointed out in the books of account and further that they were regularly maintained and also on the finding that there was no material brought on record to establish that purchases or expenses were inflated or sales suppressed and also in view of the finding that this was not a case that there was no method of regular accounting employed, the Tribunal was fully justified in coming to the conclusion that the provisions of Section 145(2) could not be invoked. - Decided in favour of assessee

Summary

Issues Involved:
Challenge to ITAT order on low gross profit addition

Analysis:
The appellant-revenue challenged the ITAT order for the assessment year 2002-03, which confirmed the CIT (Appeals) decision to reverse the Assessing Officer's addition of ?2,78,74,400 on account of low gross profit. The Assessing Officer, under Section 145 of the Income Tax Act, rejected the assessee's explanation and books of accounts, leading to the addition. However, the CIT (Appeals) rejected this addition, which was further supported by the Tribunal. The Tribunal considered a similar issue in the assessee's case for the preceding assessment year 2001-02, where the appeal was allowed for the assessee and dismissed for the revenue. The revenue had previously appealed this decision for the assessment year 2001-02 before the High Court, which ruled in favor of the assessee against the Department based on legal precedents and findings related to the correctness and completeness of the books of accounts. As the Tribunal's earlier view was upheld by the High Court, the current appeal for the subsequent assessment year was also decided in favor of the assessee, resulting in the dismissal of the appeal by the appellant-revenue.