ITO Vs Neeraj Kumar (ITAT Delhi)
ITAT Delhi held that once the books of accounts are rejected, it doesn’t warrant any adhoc addition. Thus, CIT(A) rightly restricted GP @ 1% instead of 1.5% as estimated by AO. Appeal dismissed, accordingly.
Facts- In this case the assessment order u/s. 144 of the Act was passed on 28.03.2016. AO had rejected the books of accounts and thereafter, made various additions. CIT(A) held that since books have been rejected, hence, estimating the 1% GP instead of 1.5% estimated by the AO would serve the end of justice. He held that other additions were made on adhoc basis because the books have already been rejected ultimately, Ld. CIT(A) restricted the addition to 1% of the GP. Being aggrieved, the present appeal is filed.
Conclusion- Held that the AO has rejected accounts and estimated the GP in respect of turnover shown by the assessee, hence, Ld. CIT(A) has taken a correct view that once the books of accounts are rejected, it does not warrant any adhoc addition. Accordingly, he rightly restricted the GP @ 1% instead of 1.5% estimated by the AO. During the hearing, both the parties fairly agreed that restricting the GP @1% by the Ld. CIT(A) serves the end of justice, which does not need any interference. Accordingly, we affirm the action of the Ld. CIT(A) and dismiss both the cross appeals filed by the Revenue as well as Assessee.
