KASHMIR STEEL INDUSTRIES,JAMMU vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, JAMMU

ITA 201/ASR/2018Status: DisposedITAT Amritsar20 March 2019AY 2013-149 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that book results cannot be rejected solely on the ground of a decline in profit rate without specific defects in the accounts. Since no such defects were pointed out, the addition made by the lower authorities was unsustainable.

What were the facts?

The assessee's gross profit rate declined significantly in the assessment year 2013-14 compared to the previous year. The Assessing Officer rejected the assessee's books of account due to this fall and made an addition. The CIT(A) partially sustained the addition, confirming 0.5% of the turnover.

What were the issues?

Whether the rejection of books of account and subsequent addition is justified solely on the ground of a fall in gross profit rate without identifying specific defects in the accounts.

Which sections of the Income-tax Act were involved?

Section 145(3)

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Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

Before: Sh. N. S. Saini & Sh. N. K. Choudhry

For Appellant: CA &
Hearing: 21.02.2019Pronounced: 22.03.2019

Per N. S. Saini, Accountant Member:

This is an appeal filed by the assessee against the order of CIT(A)-5, Ludhiana.

2.

The only issue involved in this appeal is that the CIT(A) erred in sustaining addition @ 0.5% of the trading results amounting to Rs.79,17,754/-.

3.

The brief facts of the case are that the Assessing Officer observed that there was a fall in the gross profit shown by the assessee over the last year. In the preceding assessment year, the assessee has shown profit of 5.47% on a turnover of Rs.119.07 crores. During the year under appeal, the assessee has shown gross profit of 2.17% on turnover of Rs.158.35 crores. He observed that there was increa

The order continues below.

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