2021 (8) TMI 502

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....s unable to argue the case on Video Conferencing. It was therefore decided to dispose off the matter after taking into consideration the written submission so filed by the assessee and other material available on record. 3. At the outset, it is noted that there is a delay in filing the present appeal. Taking into consideration the affidavit filed by the assessee, the delay of 22 days is hereby condoned and the appeal is admitted for adjudication. 4. In its appeal, the assessee has taken a sole ground of appeal which reads as under:- "That the Learned CIT Appeal-II went wrong in confirming the addition of Rs. 7,06,008/- being 25% G.P. on total turnover of Rs. 5,04,29,116/- against GP 23.60% declared by the assessee is arbitrar....

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.... 26,52,000/- whereas the difference of G.P rate of the last year and current year is only 0.35%. There was no justification to restrict the G.P addition of Rs. 7,06,008/-. Hon'ble ITAT Jaipur in the case of M/s. Gem Paradise has held that the G.P rate applied by ITAT was not justified considering the judgement of the Hon'ble Rajasthan High Court in the case of Gotan Lime Khaniz Udyog and other decision restricted the addition to Rs. 4,00,000/- as against the G.P. of Rs. 10,92,695/-. Hon'ble ITAT Jaipur in the case of Shanker Exporters v. Additional Commissioner of Income Tax has held that We have heard rival submissions and considered them carefully. After considering the submissions and perusing other material....

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.... rejection of books of account were not justified. Accordingly, we allow this ground of the assessee." Hon'ble Rajasthan High court in the case of Malani Ramjivan Jaganath v. Assistant Commissioner of Income Tax (2007) 316 ITR 120 (Raj.) has held that merely on account of deviation in G.P. rate books of accounts cannot be rejected. It is therefore, prayed that the addition of Rs. 7,06,008/- sustained by CIT(A) be deleted or be reduced as worked by applying rate of 23.95% in the immediately previous year." 6. Per contra, the ld. DR relied on the order of the lower authorities and our reference was drawn to the findings of the ld. CIT(A) contained at para 2.3 to 2.3.2 of the appellate order which read as under:- ....

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....er of Rs. 5,04,29,116/- will meet the end of justice. Accordingly addition of Rs. 7,06,008/- is upheld. This ground of appeal is partly allowed." 7. We have heard the rival contentions and perused the material available on record. The ld. CIT(A) has upheld the rejection of books of accounts by invoking provisions of section 145(3) and has estimated gross profit rate of 25% as against gross profit rate of 23.60% declared by the assessee. The rejection of books of accounts is not under challenge before and hence, the limited issue under consideration is estimating of gross profit rate once the books of accounts have been rejected and in this regard, as rightly held by the ld. CIT(A), the past history of the assessee provides a reasonable a....