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| The Tax Publishers2021 TaxPub(DT) 3884 (All-Trib) INCOME TAX ACT, 1961
Section 143(3)
Once books of account and other supporting evidence were examined by AO and no defect was found by him, then low profit outcome of business activity could not be a reason for addition to assessee's income.
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Assessment - Addition to income - Low gross profit declared by assessee - No defect detected in assessee's books
AO made addition on account of low gross profit declared by assessee considering GP declared by assessee for the preceding two years. Held: AO had duly recorded in the assessment order that books of account along with bills and vouchers were produced for examination and AO had examined the same as test check. Once books of account and other supporting evidence were examined by AO and no defect was found by him, then low profit outcome of business activity could not be a reason for addition. AO could very well conduct an enquiry to find out reasons for low G.P. declared by assessee in comparison to preceding year but low G.P declared by assessee could not be a basis or ground for making the addition.
Relied:Asstt. CIT v. Ess EII Cables Co. [ITA. No. 2792/Del/2013].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 37(1)
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