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TMI Blog2013 (12) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... e cases the G.P. rate in the relevant financial year was from 9% to 21%, whereas the assessee had disclosed a much higher gross profit rate at 28.4% - There was no justification to increase the G.P. rate beyond the highest gross profit rate in comparable cases, when the assessee had disclosed a higher rate of 22.40% for AY 2005-06 and 22.42% for AY 2006-07 - Decided against Revenue. - Income Tax Appeal No. - 124 of 2013, Income Tax Appeal No. - 148 of 2013 - - - Dated:- 13-12-2013 - Hon'ble Sunil Ambwani And Hon'ble Surya Prakash Kesarwani,JJ. For the Appellant : Bharat Ji Agarwal, Ashok Kumar For the Respondent : S. K. Garg, Ashish Bansal ORDER 1. We have heard Shri Bharat Ji Agarwal, Senior Advocate assisted by Shri Ash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal No.124 of 2013) and Rs.2,71,87,628/- (in Income Tax Appeal No.148 of 2013) made by the Assessing Officer on account of enhancement of GP by 20% as shown by the assessee, without appreciating the fact that the Assessing Officer had made such addition after discussing in detail the discrepancies found in the books of account on the basis of which such books of account were rejected u/s 145 (3) of the Act and income was computed as provided therein. 3. Whether the Hon'ble ITAT has erred in law and on facts in deleting the addition of Rs.4,35,51,668/- (in Income Tax Appeal No.124 of 2013) and Rs.2,71,87,628/- (in Income Tax Appeal No.148 of 2013) without appreciating the fact that the books of account were not found during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the manufacturing accounts were not produced. After considering the matter at length the AO rejected the books of account, after which, instead of proceeding to make best judgment assessment on the basis of turnover or making any additions he proceeded to increase the gross profit from 22.40% to 26.88% in the assessment year 2005-06 and from 22.40% to 26.90% in the assessment year 2006-07. 8. In Commissioner of Income Tax (Central) Kanpur vs. M/s Carpet Palace, Rajpura, Bhadohi (supra) we did not find any good ground to admit the appeals on the ground that the rejection of books of account cannot be a ground for the AO to increase the G.P. rate and that the fall of GP rate which stood explained, could not be a ground for rejection of bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal as the questions framed are not substantial questions of law to admit the appeal. The income tax appeal is dismissed in limine." 9. In the present case, we do not find that the material found during the search and seizure, as in the cases relating to AYs 2007-08, 2008-09 and 2009-10, (included in the block assessment period) was considered by the AO. Even if the material found related to the relevant assessment years (2005-06 to 2006-07) under consideration, the AO did not discuss such material, nor recorded any findings with regard to the suppression of turnover and did not make any additions. The AO satisfied himself in rejecting the books of account and thereafter raising the G.P. rate arbitrarily. The ITAT has given suff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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