TaxTMI 
TaxTMI 
2018 (1) TMI 392
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....rn of income declaring total income of Rs. 12,12,400/- was e-filed on 26/09/2013. The case was selected for scrutiny. The Assessing Officer made addition of Rs. 3,41,396/- after rejecting books of account and estimating the G.P. rate at 8% instead of 7.24% declared by the assessee. The Assessing Officer also made addition of Rs. 1.00 lac out of various expenses debited in the P&L account. The ld. CIT(A) confirmed the G.P. addition and gave part relief from ad hoc disallowance of Rs. 1 lacs from the expenses. 3. Now the assessee is in appeal before the ITAT by taking following grounds of appeal: 1. INVALID INVOKATION OF SEC.145(3) (a) That on the facts and in the circumstances of the case Ld. CIT(A) has grossly erred in ....
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....e from 7.24% to 8% arbitrarily without any material facts on record and thus trading additions of Rs. 341396/- are without justification. 3. Invalid Disallowance of Rs. 50000/- out of Expenses Arbitrarily That on the facts and in the circumstances of the case Ld. CIT(A) has grossly erred in law and facts in confirming lump sum disallowance of Rs. 50000/- of expenses. Ld. CIT(A) has without mentioning any specific query on specific voucher of any head of expenses disallowed in lump sum Rs. 50000/- in the head freight & cartage outward rebate discount & claim, conveyance without any material facts on record therefore disallowance of Rs. 50000/- out of expenses are without justification. 1. That on the facts and in t....
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....tion 145(3) of the Act and has rejected the books of accounts of the appellant and has made trading addition of Rs. 3,41,396/- by applying the GP rate of 8% against 7.24% declared by the appellant. The issue has been discussed by the AO in detail from page No. 2 to 6 of the assessment order. (ii) During the appellate proceedings, the appellant has made detailed submissions as reproduced above and stated that the AO was not justified in rejecting its books of accounts u/s 145 (3) of the Act and it was stated that it has maintained day-to-day stock details. It was further submitted that the AO has applied a GP rate of 8% without appreciating the fact that its trading results were progressive and therefore the trading addition made by....
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....nts of the appellant u/s 145 (3) of the Act. The AO has applied a GP rate of 8% against 7.24% declared by the appellant. It is an undisputed fact that during the year under consideration, the trading results were better in comparison to the immediate preceding year but it may be mentioned here that the appellant has not brought on record any material which may indicate that its cases for earlier years were .completed under scrutiny assessments. (v) In view of these facts, it is held that the AO was justified in making trading addition of Rs. 3,41,396/- to the income of the appellant by estimating GP rate at 8% and hence, the same is hereby sustained." 6. The ld AR of the assessee has submitted that the gross profit for the year ....
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.... the year under consideration was better than the two preceding years, which is clear from the following chart. A./Y. Gross Turnover Gross Profit N/P (In Rs). GP Rate % NP Rate % 2011-2012 22188617 1596143 598586 7.19% 2.70% 2012-2013 34645905 2496018 952841 7.20% 2.75% 2013-2014 45333610 3283103 1257833 7.24% 2.77% The Hon'ble Rajasthan High Court in various decisions have held that past history of the assessee is the best guide to accept/reject the book result of the assessee. The Assessing Officer had not brought on record any positive evidence to enhance the gross profit for making additions. The G.P. is better than earlier year. The assessee is purchasing raw ma....