2009 (12) TMI 565

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.... Advocate. For the respondents: M/s.Vinay and Vandana Kuthiala, Advocates. Deepak Gupta, J.(Oral) This appeal was admitted on the following substantial question of law:- "1. Whether the case of M/s.Kachwala Gems versus JCIT (2007) 288 ITR 10(SC) is applicable and covers the case of appellant with regard to application of rate of 33% imposed by the Tribunal?" Briefly stated the facts of th....

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....er did not accept the books of account of the assessee and assessed the gross profit of the assessee at the rate of 33% of the sales. The assessee had declared gross profit of Rs.6,98,577/- on total sales of Rs.33,68,447/- which gave gross profit rate of 20.73%. In the previous year, the gross profit rate was 33.04%. On appeal the Commissioner of Income Tax (Appeals) deleted the addition on the gr....

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...., the Assessing Officer was well within his right to reject the books of accounts. The Apex Court held as follows:- "10. As regards the rejection of the books of account, cogent reasons have been given by the income-tax authorities for doing so, and we see no reason to take a different view. 11. It is well settled that in a best judgment assessment there is always a certain degree of guess w....

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....dition had been made on account of disclosures of unaccounted sales which had inflated the gross profit rate, and, therefore, the Assessing Officer should not have based the profit on the percentage of the previous year. Following the law laid down in kachwala Gems, it is apparent that the books of account of the assessee had to be rejected since there is no material on record, i.e., purchase vouc....