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of <h1>Tribunal Partially Allows Appeal: Books of Accounts Accepted, GP Rate Adjusted, Depreciation Allowed</h1> The Tribunal partially allowed the appeal, overturning the rejection of books of accounts and the confirmation of the GP rate at 10%, allowing ... - Issues involved: Rejection of books of accounts and confirmation of GP rate at 10% against GP rate of 7.83%; Disallowance of depreciation in respect of addition to the building; Confirmation of additions at the rate of 10% on various expenditures.Rejection of books of accounts and confirmation of GP rate at 10% against GP rate of 7.83%:The AO rejected the books of accounts and estimated the GP at 10% due to a decline in the net profit ratio compared to earlier years. The CIT(A) upheld the rejection but noted that the AO's calculation was not correct. The Tribunal found the rejection unjustified as there was no evidence of unreliable books or vouchers. The Tribunal also considered the substantial increase in expenses and turnover, concluding that the rejection was not warranted. The grounds were allowed.Disallowance of depreciation in respect of addition to the building:The AO disallowed depreciation on an addition to the building, stating there was no necessity for the addition. The CIT(A) allowed the issue in part, directing the AO to rectify the addition. The Tribunal held that if the additions were made by the assessee, depreciation should be allowed, and directed the AO to allow depreciation on the addition made to the building. Ground No.4 was allowed.Confirmation of additions at the rate of 10% on various expenditures:The AO made adhoc additions on various expenditures, which were confirmed by the CIT(A). The Tribunal sustained the total addition of Rs. 1 lakh, stating it would meet the ends of justice due to lack of proper vouchers for some expenses. The appeal was allowed in part.In conclusion, the Tribunal partially allowed the appeal, overturning the rejection of books of accounts and the confirmation of the GP rate at 10%, allowing depreciation on the building addition, and sustaining the total addition of Rs. 1 lakh on various expenditures.
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