2025 (6) TMI 1950

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....ssessee has raised the following grounds of appeal: "1 In the facts and circumstances of the case and in law, Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in rejecting the books of accounts u/s 145(3) of the IT Act, 1961 merely on the ground of non-maintenance of stock register. 2. In the facts and circumstances of the case and in law, Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in rejecting the books of accounts u/s 145(3) of the IT Act, 1961 without pointing out any defect in the maintenance of books of accounts. 3. In the facts and circumstances of the case and in law, Learned CIT(A) has erred in sustaining the trading addition of Rs. 3,59,72,920/- made by....

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....vant details, such as cash book, bank book, ledger, journal ledger, sale and purchase ledgers and supporting vouchers etc. It was also explained to the AO that all the receipts were through banking channels, and mostly from the Government authorities. Further that all the expenditure was subjected to TDS and mostly paid through banking channel. 5. The AO, however, observed that the assessee has not maintained day-to-day stock register. 6. The assessee explained to the AO that the assessee was engaged in construction and maintenance of roads, rails, bridges etc., and that in the nature of the business of the assessee, it was not possible to maintain day-to-day stock register. 7. The AO, however, did not get satisfied with the above reply ....

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....or sales in this case. The only reasons found by the AO for rejecting the books of accounts is that the assessee had not maintained day-to-day stock register. The assessee in this respect has already explained that in the nature of business of the assessee, it was not possible to maintain such day-to-day register. 10. So far as the low GP rate for the year under consideration is concerned, the assessee in this respect has relied on the following chart: S.No A.Y. 2018-19 A.Y. 2017-18 A.Y. 2016-17 Remarks Turnover (Rs) 984899302 2026016329 645462528 51626036~ The N.P. rate disclosed by the assessee during the year is all time high and is better in comparison to earlier two years. Gross Profit (Rs) 20067850 142442200 G.P. Rat....

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....ls and the TDS duly deducted on the expenditure. The AO has not pointed any defect or infirmity in the books of accounts of the assessee nor about the sales and expenditure recorded by the assessee. Merely because, the GP rate for the under consideration is low as compared to the earlier years, that itself, cannot be the ground to reject the books of accounts. The reliance in this respect can be placed on the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Smt.Poonam Rani, 326 ITR 0223, wherein, the Hon'ble Delhi High Court has held that in the absence of any finding that the assessee has inflated the cost of raw-material or the cost of processing or that he has made out of books sales of finished goods and suppressed sales,....