2023 (3) TMI 1189

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....of Rs. 10,13,922/- on the alleged reason that on comparative loss with profit of last years the profit was lower although he had no evidence to prove the so-called scientifically analyzed book profit and no evidence to detect any part of expenses were inflated or suppressed. ii. For that the ld. CIT(A) should have considered that ld. Assessing Officer never rejected the book result u/s 145(3) or the never detected any defect in the accounts or expenses as placed before him and as such the entire addition as aforesaid based on surmises and conjectures is illegal, arbitrary and without jurisdiction as it seeks to violate the principles of justice. iii. For that the ld. CIT(A) was not justified in confirming the addition by t....

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.... year 2014-15 to 2017-18 turnover ratio as appeared in the following manner: F.Y. Book Profit/Turnover Ratio 2013-14 10,05,515/- / 4,09,29,202/- 2.46% 2014-15 16,28,989/- / 4,75,34,444 3.43% 2015-16 22,92111/- / 5,67,91,540/- 4.03% The average turnover ratio comes to 3.32% (2.46% + 3.46% + 4.03% /3) 3. However, the assessee firm has disclosed book profit turnover ratio 1.59% which was very low compared to last three preceding previous years. Therefore, the ld. AO calculated the book profit ratio 3.32% instead of 1.59% by comparing assessee's last three years audited accounts in the following manner: "Book profit as per average book profit (BP)/Turnover ratio: Rs. 19,47,728/- of the three pr....

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....thorities below and he has supported the order passed by the ld. CIT(A) as well as ld. AO. 7. We after hearing the rival submission of the parties noticed that the assessing officer made the addition on the estimated basis without having rejected the books of accounts filed by the assessee at the time of hearing before him as the accounts maintained by the assessee were duly audited u/s 44AB of the Act and all purchases and sales were recorded in the books of accounts too and when books of accounts were not rejected the Hon'ble Calcutta High Court in the case of Swadeshi Commercial Co. Ltd. vs CIT (ITA No. 219 of 2001 dated 18.12.2008) (Cal) held that gross profit cannot be estimated. In the instant case, the ld. AO has not pointed out o....