G.P. rate to be accepted if it is higher than average G.P. rate of last three years

Having perused the documents on record with the assistance of the learned counsel for the revenue, we notice that the Tribunal had though confirmed the view of the revenue authorities with respect to the rejection of the books of account of the assessee, did not accept the  re-computation of higher rate of gross profit on the premise that the average gross profit rate of last three years immediately  preceding the year  under consideration came to 14.79%.   On such basis, the Tribunal  found that the claim of gross   profit rate @ 15.27% cannot be stated to be low. On such basis, the assessee’s appeal was allowed.

TAX APPEAL No. 449 of 2011

COMMISSIONER OF INCOME TAX
Versus
KIRAN INDUSTRIES PVT LTD

CORAM : HONORABLE MR.JUSTICE AKIL KURESHI and

HONORABLE MS.JUSTICE HARSHA DEVANI

Date : 12/09/2012

ORAL ORDER

(Per : HONORABLE MR.JUSTICE AKIL KURESHI)

1. Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 01.10.2010, raising the following questions for our consideration :

“[1] Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in deleting the addition of Rs. 1,50,58,882/- made by the Assessing Officer and confirmed by the Appellate Commissioner on account of low gross profit rate?

[2] Whether on the facts and in the circumstances of the case, the order passed by the Income Tax Appellate Tribunal is just, proper and legal as the same is passed without giving any cogent and relevant reasons to show how the findings arrived at and the conclusions reached by the Appellate Commissioner are not just, proper and legal?