TaxTMI 
TaxTMI 
2017 (6) TMI 337
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....he AO completed the assessment under section 143 (3) of the Act, on 31/01/2013, determining his income at Rs. 86.43 lakhs. 2.First ground of appeal is about holding that rejection of books of accounts by the AO was not correct and admission of additional evidences was in violation of rule 46A of the Income Tax Rules, 1962(Rules).During the assessment proceedings, the AO found the assessee had shown gross profit at the rate of 17.22%, that last year it had shown gross profit at the rate of 17.89%. He directed the assessee to file working of item-wise closing stock and produce all the books of accounts on stock register. As per the AO the assessee produced bills of purchase and sales for a few months stating that it was not possible to pro....
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....n before the AO,that he had also not produced all bills during the assessment proceedings, that the FAA had admitted additional evidences,that he should have confronted the AO with the new evidences produced before him,that the AO had rightly rejected the book results.The Authorised Representative contended that no new evidences were filed before the FAA, that identical issue was dealt by the Tribunal while deciding the appeal for the AY. 2009-10(ITA/4891/Mum/20211 dated 12/ 01/2017). 5.We find that the Tribunal has deliberated upon the similar issue while deciding the appeal for the AY.2009 -10(supra), in following manner: "3.Briefly stated, the facts are that during the course of assessment proceedings, the AO asked the assessee to ....
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....rved that if the AO wanted to reject the books of accounts, he ought to have compared the purchase bills and sales bills with the ledger account and established that there was either inflation of purchase or suppression of sales which was not done. Further the net profit admitted by the assessee is higher when compared to last year. In view of the above, the learned CIT(A) directed the AO to delete the addition of Rs. 29,92,009/- made on account of alleged lower GP. 4.1 The learned CIT(A) observed that the assessee had paid commission by means of account payee cheques and the cheques were cleared in the name of commission agents as seen from the bank statements of the assessee. The AO has not conducted any enquiry with commission agents ....
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....e basis sale and purchase bills for few months were filed. It was submitted that due to huge volume it was practically not possible to produce the entire bills, but if the AO would have insisted, the same would have been filed/ produced before him. We agree with such a contention of the assessee, because, firstly, the AO looking to the huge volume of bills and details could have asked for purchase and sale bills on test check basis i.e., on sample basis to tally as per the entries in the books of accounts, which he has not done; secondly, the AO has applied the Gross Profit Rate of 25% without considering the assessee's past history or any other material or comparability; before the CIT(A) and before us, it has been submitted that the gross....
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....elevant portion of the said order and it reads as under: ""3.1 The AO noticed from the P&L account that the assessee had shown commission payment of Rs. 29,70,083/-. The assessee was asked to file party-wise details of commission paid along with details of services rendered by the payees and the basis for the quantification of such commission paid. The assessee filed the partywise details of commission paid and the details of TDS made thereon. The AO observed that in the immediate preceding year, the assessee had claimed commission payment of Rs. 15,71,986/- @3% and in the F.Y. 2005-06, the assessee had shown commission payment of Rs. 6,38,059/- which was @2.5% of the sales made through salesmen. In the F.Y. 2006-07, the assessee had sho....