Low GP rate as compared to earlier Asst. Year can’t be the sole reason for rejection of books of accounts or for making addition on account of low gross profit:

AO made addition on account of low gross profit which was deleted by both the lower appellate authorities. On Revenue’s appeal, the Hon’ble High Court observed that AO had made the said addition after rejecting assessee’s books on the sole ground that GP rate of relevant Asst. Year was less than that of preceding Asst. Year ignoring the facts that day to day stock registers were maintained on computer. No specific defects in assessee’s books were found out by AO. It was held that ITAT was right in deleting the said addition in the given factual background and Revenue’s appeal was dismissed.

[SYMPHONY COMFORT SYSTEM LTD. - TAX APPEAL NO.1501 of 2011 - GHC]