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| The Tax Publishers2021 TaxPub(DT) 0824 (Jp-Trib) INCOME TAX ACT, 1961
Section 145(3)
Where assessee had declared better trading results as compared to preceding year and such results provided a reasonable basis to hold that there should not be any addition in the hands of assessee, AO was not justified in rejecting books of assessee and making ad hoc addition and that too without finding any defect in books of account and vouchers of assessee.
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Accounting method - Rejection - Assessee declared better trading results as compared to preceding year - AO not detected any defect in books of account of assessee
AO rejected assessee's books of account and made addition by applying NP rate of 9% instead of 7.99% declared by assessee. Assessee's case was that AO failed to conisder books results, i.e., GP and NP of assessee which were more than preceding year. Held: Once assessee-company had declared better trading results as compared to preceding year and such results provided a reasonable basis to hold that there should not be any addition in the hands of assessee, AO was not justified in rejecting books of assessee and making ad hoc addition and that too without finding any defect in books of account and vouchers of assessee.
Followed:Deep Jyoti Company v. The ACIT [ITA No. 961/JP/2019, dt. 26-9-2019].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2016-17
IN THE ITAT, JAIPUR BENCH
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