Variation in GP rates of current year and preceding years couldn’t justify additions

Section 145, read with section 37(1) of the Income-tax Act, 1961 - Method of accounting - Rejection of accounts (Suppression of job charges) - Assessment year 2005-06 - On scrutiny assessment, Assessing Officer rejected books of account of assessee, a dying and printing mill - He made addition to profit of Rs. 65.89 lakh computed on account of suppressed job charges - Tribunal found that Assessing Officer had estimated production after taking into consideration average job charges which was not proper - Tribunal taking into consideration gross profit ratio and other factual aspect directed addition of Rs. 13 lakhs instead of Rs. 65.89 lakhs - It was found that gross profit ratio reflected in assessee's accounts for year under consideration when compared to earlier years showed that there could not be such huge addition - Whether order of Tribunal needed to be upheld - Held, yes [Para 2][In favour of assessee]

Refer:[2014] 45 taxmann.com 362 (Gujarat)

HIGH COURT OF GUJARAT

Commissioner of Income-tax-I
v.
Balkrishna Dyeing & Prinating Mills