Rejection of books of accounts

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 December 2011 can books of accounts be rejected if g p rate declined compared to last year.

what should be the reply from our side to the a.o. if show cause given on above matter

Ratan Sharma

Ratan Sharma (Expert)
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05 December 2011 The assessee has maintained the regular books of account which are also audited u/s. 44AB of the Income Tax Act( if audited ). All the sales bills , purchase bills & other documents are submitted before you for verification. The G.P. rate has been decreased due to stiff competition in the market. In view of the above it is requested that the book profit be accepted. Dear friend the A.O. can reject the books of accounts if get the substantial evidence that the G.P. ratio shown by assessee is incorrect.
If you have assessment order of any preceeding years then submit it with the A.O. that earlier the assessment of assessee is completed and no discrepancy is noticed in the books of accounts. If you have the trading profit & loss of account of any other party then submit it to show that the g.p. shown by you is comparable. All other grounds can be taken as per the case record.

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