Books of Accounts cannot be rejeced on mere fall in G.P Ratio

Hon’ble Jodhpur ITAT has in the case of ACIT V/S Smt. Meena Singh Shekhawat L/h of Late Sh. Bhopal Singh Shekhawat has held that fall in a G.P rate cannot be made a reason for invokining section 145(3) by concluding as under:-

Against the deletion of the trading addition of Rs. 2,89,123/- in A.Y. 1998-99 , the ld. D.R. has argued that the G.P. rate disclosed in this year is on lower side as compared to earlier year. Since the books of accounts of the assessee having been lost and this fact being accepted by the Assessing Officer, the application of average rate of G.P. in the two past years is wholly justified. The ld. CIT(A) has relied on the decision taken in the first ground and the position of facts and contentions of the parties remaining same and similar he has deleted the trading addition.

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