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2005 (6) TMI 204 - ITAT AHMEDABAD-DUnaccounted sales of milk and addition made on account of other milk products - audit report furnished u/s 44AB - HELD THAT:- We find that the AO has not pointed out any specific defects in the books of account maintained by the assessee whereas, the assessee maintained regular books of account which are subject to tax audit u/s 44AB. We find that the case under consideration does not fall in any category of circumstances under which the AO can acquire the power u/s 145. The AO has made the addition merely on the presumption/assumption as the assessee failed to explain a peculiar type of query of AO regarding consumption. It has also been noticed that the AO did not find any material or evidence that the assessee had made sale out of the books of account. It is settled position of law that on the basis of conjectures, surmises and pure guesswork the addition is not sustainable. On the contrary we find that the assessee has maintained regular books of account and net gain or shortage in process shown by the assessee in other years has been accepted by the Department as evident from the chart, reproduced. Thus, we are of the considered view that the AO is not justified in making impugned additions. We accordingly delete the addition made on account of unaccounted sales of milk and addition made on account of other milk products. In the result, the appeal is partly allowed.
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