2018 (3) TMI 225

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..... is Appeal under Section 260A of the Income Tax Act, 1961 ("The Act" for short), challenges the order dated 17 December 2014 passed by the Income Tax Appellate Tribunal ("The Tribunal" for short). The impugned order dated 17 December 2014 is in respect of Assessment Year 2005-06. 2. The Revenue urges the following questions of law for our consideration: 1. Whether on the facts and in the circumst .....

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..... pondent-Assessee. In response, the Assessee pointed out as follows: "Our company, is a concern mainly engaged in trading of steel & engineering products. We purchase and sale these goods on very competitive low margin but our volume are very high. We normally purchase the goods and resale them at the minimum time gap. It is a known fact that rates of steel keep fluctuating and it is a very volati .....

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..... ground that the purchase price of goods was much higher than the selling price of those very items. On rejection of the books of accounts the Assessing Officer estimated the gross profit on the basis of 2 percent of the sales. This resulted in enhancement of gross profits from Rs. 26.08 Lakhs to Rs. 1.18 Crores. 5. Being aggrieved with the order dated 31 December 2007, the Respondent-Assessee fil .....

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..... t held that merely because the Respondent-Assessee being a trader has sold goods at prices lower than the purchase price and/or the prevailing market price would not warrant rejection of the books of accounts. 6. The grievance of the Revenue with the impugned order is that the Respondent-Assessee has sold goods at price lower than its purchase price. Therefore, the books of accounts cannot be rel .....

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..... ase of the Revenue that any of the above circumstances specified in Section 145(3) of the Act are satisfied. The rejection of accounts is justified on the basis that it is not possible for the Assessee who is a trader to sell goods at the prices lower than the market price or purchase price. In fact as observed by the Apex Court Commissioner of Income Tax, Gujarat Vs. A. Raman & Co. (1968) Vol.67 .....

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