2015 (9) TMI 502

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.... Whether on the facts and in law the ITAT is justified in upholding the rejection of books of account merely for absence of stock register, despite there being no other defect in sale, purchase and books of accounts; which means non-fulfillment of ingredients u/s 145(3) of Income Tax Act, 1961 regarding incompleteness or incorrectness of books of account as the AO himself found that the stock shown is on the higher side? 2. Briefly stated, the facts, necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee filed his return of income 30.9.2009 for the assessment year 2009-10 declaring the income at 14,04,784/-. The Assessing Officer vide order dated 28.12.2011 (Annexure A-1) passed under Section 145....

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....10% on gross sales of 11.74 crores after rejecting the books of account under Section 145(3) of the Act on the ground that no stock register was maintained by the assessee and, thus, made an addition of 41,09,728/-to the total returned income. The CIT(A) held that the figure of closing stock declared by the assessee in the profit and loss account was not verifiable in the absence of stock register and so the GP rate was not verifiable and accordingly restricted the GP rate to 9% and upheld the rejection of books of account. The Tribunal while upholding the orders of the Assessing Officer as well as the CIT(A) qua rejection of books of account, estimated the GP rate at 8% instead of 9% as ordered by the CIT(A). 5. The assessee was trading i....