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TMI Blog2016 (8) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... sses at Jalandhar were 10.64%, 12.09% and 13.6%. The CIT (Appeals) adopted the GP rate of 25%. There is, however, nothing in the order to indicate why the GP rate of 25% was adopted. The average of GP rates of Phagwara and Jalandhar was also much less. The Tribunal on the other hand adopted the average GP rate of assessees at Jalandhar as the assessee in the case before us also carried on the business at Jalandhar. The Tribunal observed that the CIT (Appeals) had fixed the GP rate of 25% which was not based on any material or cogent reasoning. This finding of the Tribunal is based on facts which is neither perverse nor absurd. - Income Tax Appeal No. 67 of 2014 (O&M) - - - Dated:- 8-8-2016 - MR. S.J.VAZIFDAR AND MR. DEEPAK SIBAL, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not make addition on account of law G.P. rate. (iii) Whether on the facts and in the circumstances of the case and in law the Hon ble ITAT was justified in estimating G.P. rate of the assessee ignoring the fact that in view of the specific investigation done, the past history and comparable cases were not entirely relevant to the present case while deciding the issue. It is not necessary to answer the other two questions raised in the appeal. 3. The assessee filed a return of income declaring an income of ₹ 93,513/-. The Assessing Officer rejected the books of accounts under section 145(3) of the Income Tax Act, 1961 (for short the Act ). The assessee has not challenged the rejection of the books. The assessee carried on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal adopted the G.P. rate of 12.38%. 4. Section 144 of the Income Tax Act,1961 in so far as it is relevant reads as under:- Best judgment assessment: 144. (1) If any person- (a) fails to make the return required under subsection (1) of section 139 and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or (b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142 or fails to comply with a direction issued under sub-section (2A) of that section, or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the Assessing Officer, after taking into account all relevant material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible. The CIT (Appeals), therefore, decided to apply the GP rate. On the rejection of the books of accounts on the ground that an assessee had returned low gross profit percentage, it is open to the authorities to ascertain the correct GP rate. 7. In such circumstances, the adoption of the GP rate instead of adding of ₹ 1.32 crores to the income of the assessee cannot be said to be perverse or irrational. The CIT(Appeals) had the GP rates of five assessees in respect of Phagwara and three in respect of Jalandhar. The GP rates of assessees of Phagwara ranged from 16.21% to 18.30% whereas the GP rates of three assesses at Jalandhar were 10.64%, 12.09% and 13.6%. The CIT (Appeals) adopted the GP rate of 25%. There is, however, nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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