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| The Tax Publishers2020 TaxPub(DT) 1841 (Jp-Trib) INCOME TAX ACT, 1961
Section 145(3)
It is an admitted position that past history of assessee can be taken as reliable basis for estimating gross profit rate. In the instant case, as against average gross profit of past years which comes to 3.72%, assessee has declared G.P. of 3.12% and AO made addition by applying GP rate of 3.60%. Which was closer though lower than average gross profit rate. Accordingly, addition was sustainable as reasonable.
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Accounting method - Rejection - Reasonable basis for estimation of gross profit rate - AO considered past history of assessee's business.
AO rejected assessee's books due to unverifiable purchases in case of non-SEZ unit of assessee and assessed gross profit @ 3.60% as against 3.12% declared by assessee. Assessee challneged this.Held: It is an admitted position that past history of assessee can be taken as reliable basis for estimating gross profit rate. In assessee's case. As against average gross profit of past years which comes to 3.72%, assessee has declared G.P. of 3.12% and AO made addition by applying GP rate of 3.60%. Which was closer though lower than average gross profit rate. Accordingly, addition was sustainable as reasonable.
REFERRED :
FAVOUR : Against the assessee.
A.Y. :
INCOME TAX ACT, 1961
Section 143(3)
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