2018 (12) TMI 1524 - HC - Income Tax

Rejection of books of accounts - Held that - Assessee s book results and to make additions on the grounds that the assessee had made sales at low rates and in some cases sales were to non-existing parties. The Tribunal in the impugned judgment examined relevant material on record and came to the conclusion that the Assessing Officer was not justified in rejecting the book results. The Tribunal also gave detailed reasons why the action of the Assessing Officer in comparing gross profit of other entities engaged in the same business was not justified or correct. We also notice that the CIT appeals had also given substantial relief to the assessee.

Summary

Issues:
Challenging the judgment of the Income Tax Appellate Tribunal regarding acceptance of sales by Commercial Tax Authorities and burden of proof on the assessee for unverifiable sales at low rates.

Analysis:
The High Court examined the case where the Revenue challenged the Tribunal's judgment regarding the acceptance of sales by the Commercial Tax Authorities and the burden of proof on the assessee for sales at low rates. The issues revolved around the rejection of the assessee's book results by the Assessing Officer due to alleged sales at low rates and transactions with nonexisting parties. The Tribunal, after reviewing the relevant material, concluded that the Assessing Officer was unjustified in rejecting the book results. It was observed that the Assessing Officer's comparison of gross profit with other entities in the same business was not valid. Additionally, the CIT appeals had already provided significant relief to the assessee.

The High Court emphasized that the entire matter was fact-based, and no perversity was identified in the Tribunal's conclusion. It was determined that no question of law arose from the case, leading to the dismissal of the tax appeals. The judgment highlighted the importance of factual analysis in such cases and upheld the Tribunal's decision in favor of the assessee.