AO cannot sit on chair of businessman to replace his business strategy by his own whims and fancies: ITAT:

AO cannot sit on chair of businessman to replace his business strategy by his own whims and fancies: ITAT The Income Tax Appellate Tribunal (ITAT) in the matter of ACIT vs Ashish Bansal has reiterated that it is a well-accepted principle tax jurisprudence that the Assessing Officer cannot sit on the arm chair of a businessman assessee to replace his business strategy by his own whims and fancies. When the assessee took decision to reduce GP rate with an intention to fetch high turnover resulting into increase in the total net profit and under this strategy the assessee under took turnover of 34 times in comparison to the immediately preceding year taking sky high increase in the turnover which resulted into reduction of GP rate to 0.41%. From the copy of the three years comparative chart with breakup of jewellery segment, bullion segment and Job work segment it is clear that when the turnover of assessee was less than the GP rate was 8.59% and when the assessee under business strategy increase the turnover to 34 times to Rs 292.13 crore then the GP rate was reduce to 0.41% the GP rate of other segments such as artificial jewellery, semi precious stones and job work also faced marginal changes but the Assessing Officer only noted abnormal fall in GP rate of jewellery without pointing out any defects or discrepancies in the audited books of accounts of assessee and this approach without any other positive material or evidence, only on standalone basis is not correct and justified. In view of the foregoing, ITAT held that the ld. CIT(A) was right in deleting the addition made by the Assessing Officer without any justified reasoning and cogent basis. Thus, ITAT declined to interfere with the findings arrived by ld. first appellate authority as they were unable to seen any ambiguity, perversity or any valid reason to interfere with the findings of the ld. CIT(A). Accordingly, grounds of revenue being devoid of merits were dismissed.