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TMI Blog2016 (10) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... by the auditors. We, therefore find no reason to interfere with the order of ld. CIT(A). We uphold the same. The grounds raised by the assessee are dismissed. - ITA No.706/Ahd/2014 - - - Dated:- 5-10-2016 - Shri Rajpal Yadav, JM, and Shri Manish Borad, AM. For The Appellant : Shri Rashesh Shah, AR For The Respondent : Shri James Kurien, Sr. DR ORDER PER Manish Borad, Accountant Member . This appeal of the Assessee for Asst. Year 2009-10 is directed against the order of ld.CIT(A) I, Surat, dated 14.02.2014 vide appeal no.CAS-I/TFR-6.80/219/2012-13 passed against order u/s 143(3) of the IT Act, 1961 (in short the Act) framed on 23.12.2011 by DCIT, Circle-6, Surat. 2. Briefly stated facts of the case as culled out from the records available before us are that assessee is a partnership firm engaged in the business of construction of flats. Survey action u/s 133A of the Act was carried out at the business premises of the assessee o 15.9.2008. Partner of the assessee firm admitted to have earned unaccounted income of ₹ 1,11,00,100/- over and above the regular business of the firm and offered to disclose the same during Asst. Year 1009-10. Return of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal :- 1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of Assessing officer in rejecting books of accounts u/s. 145(3) of Income Tax Act 1961. 2. On the facts and circumstances of the case as well as law on the subject the learned Commissioner of Income Tax (Appeals) has erred in partly confirming the action of Assessing Officer and making addition of ₹ 10,10,213/- on account of low G.P Ratio. 3. It is therefore prayed that the above additions made by Assessing Officer and confirmed by learned Commissioner of Income-tax (Appeals) may please be deleted. 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal 5. Ground Nos. 1 2 are inter related and so they are taken together for disposal. 6. Ld. AR submitted that the fall in GP rate from 24.63% to 3.82% was on account of change in estimates which has resulted into higher GP in earlier years and reduction on profits in the current year because closing work in progress in earlier year was mistakenly taken excess by ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2008-09 wherein closing working in progress has been over stated by ₹ 10,10,213/- which has resulted into the overstated opening stock for the year under appeal lowering the GP rate to 3.82%. We also observe that apart from this particular observation no defect has been pointed out by the lower authorities in the books of account, financial statement, revenue and other expenditure incurred and in all accepted the issue relating to GP rest of books result have been accepted. We further observe that ld. CIT(A) has sustained this addition towards lower GP rate at ₹ 10,10,213/- by observing as below :- 3.3 I have considered the facts of the case, basis of addition and submissions of appellant. The reason given by appellant for reducing the income during the year that in the earlier year income was shown at higher amount as the value of closing stock was overstated by ₹ 10,10,213/- therefore to correct the mistake, income was reduced by that amount during the year under consideration, does not seem convincing. The AO has rightly held that the books of account of assessee were duly audited by auditors and closing stock valuation has been certified by the partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 14,59,833/-. In my opinion, once the AO has come to know that there is under estimation of profit by ₹ 10,10,213/- in the year under consideration, he should have made the addition to that extent only by estimating the gross profit. Had the AO not in the knowledge of exact figure of under estimation of profit, he could have worked out the profit on estimation basis on the basis of earlier years G.P. rate. But, here he is in the knowledge of the specific amount of suppression of profit therefore he should have made the addition of that specific amount even if the books of account were rejected u/s. 145(3) of the Act and estimated the profit. Without prejudice to the above, even if books of account of appellant are not rejected u/s. 145(3) of the Act, the addition of ₹ 10,10,213/- is liable to be sustained for the reason that the AO has found out that the appellant has wrongly reduced the profit of the year under consideration taking the basis of mistake committed in the earlier year which is not allowable as per law. Any mistake of earlier year has to be rectified or revised in that year only and it cannot be carried forward in subsequent years to be rectified o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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