ITAT deleted addition as books of account had not been rejected u/s 145 (of Income Tax Act, 1961)
ITAT deleted addition as books of account had not been rejected u/s 145 (of Income Tax Act, 1961)
Assessee was into dyeing & printing of cloth. AO observed that it had shown GP at 13.99 crores and GP rate increased to 20.28% as against GP rate of 19.13% of preceding year, and assessee had shown lower closing stock work in progress. AO applied prevailing market rate and added the difference. CIT(A) upheld addition. ITAT deleted addition, following its Cordinate Bench’s decision, and as books of account had not been rejected u/s 145 (of Income Tax Act, 1961).-501669
1. Assessee a private limited company was in the business of dyeing and printing of cloth on job work basis.
2. It declared a total income of Rs.3,33,69,066 which was revised to Rs.3,34,76,405.
3. On scrutiny assessment, notice 143(2) was served upon the assessee.
4. During the assessment proceedings, AO observed that assessee had shown total turnover of Rs.68.99 crores and GP at 13.99 crores and GP rate increased to 20.28% as against GP rate of 19.13% in the immediately preceding year.
5. AO observed that assessee had shown lower closing stock work in progress at Rs.30,57,654.
6. AO on the basis of prevailing market system of manufacturing, calculated the work in progress at Rs.46,13,851 and added the difference.
7. AO made disallowance of Rs.50,000 towards factory expenses.
8. CIT(A) dismissed the assessee appeal relating to addition of Rs.15,56,197.
On appeal, the ITAT held as under:
9. Respectfully following the decision of co-ordinate bench above, as the facts are similar and also in the given circumstances wherein assessee's books of account have not been rejected u/s 145 (of Income Tax Act, 1961)..
10. No specific defect has been pointed out in the quantitative records maintained by the assessee..
11. Above all ld. Assessing Officer has made addition just on the estimate basis and also due to the fact that in the next Asst. Year 2010-11 no addition has been called for by the same Assessing Officer on this ground on valuation of work in progress,
10. We are of the view that addition of Rs. 15,56,197/- needs to be deleted and, we, therefore, set aside the order of ld. CIT(A) and allow the ground of assessee.
Case Reference - Aaiswarya Prints Dyeing & Printing Mills Pvt Ltd Vs. Addl. CIT
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD '' C " BENCH - AHMEDABAD
Before Shri Rajpal Yadav, JM, & Shri Manish Borad, AM.
ITA No.1954/Ahd/2012
(Asst. Year:2009-10)
×
