https://www.taxtmi.com/caselaws?id=776408 The ITAT Indore held that the AO's addition based on averaging the gross profit rate of preceding years at 8.23% was incorrect. Mere reduction in gross profit rate compared to earlier years, without adverse material against the assessee, does not justify rejecting the books of accounts or making additions. The tribunal found that including the year under consideration in the averaging was improper and inconsistent with law. The AO's sole ground of serious defects in the books was not substantiated by tangible evidence. Consequently, the addition was set aside, and the decision was in favor of the assessee. en-us Mon, 21 Jul 2025 00:00:00 +0530 Sat, 09 Aug 2025 09:32:49 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=776408 The ITAT Indore held that the AO's addition based on averaging the gross profit rate of preceding years at 8.23% was incorrect. Mere reduction in gross profit rate compared to earlier years, without adverse material against the assessee, does not justify rejecting the books of accounts or making additions. The tribunal found that including the year under consideration in the averaging was improper and inconsistent with law. The AO's sole ground of serious defects in the books was not substantiated by tangible evidence. Consequently, the addition was set aside, and the decision was in favor of the assessee. Case-Laws Income Tax Mon, 21 Jul 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=776408