TMI Blog2011 (10) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO rightly rejected the book result in the absence of stock register and discrepancies detected in the cash book, Department has also challenged Ld. CIT s action in reducing car maintenance expenses, deprecation on car and telephone expenses from 20% to 10% without giving cogent reasons. 2. Facts indicate that a survey u/s 133A was carried out on 29.11.2005 by the Investigation Wing of the Income Tax Department, New Delhi at the business premises of the assessee at C-10, Connaught Place, New Delhi. During the survey, the Survey Team found that the Books of Accounts maintained by the assessee were not complete. The same were impounded by the Department. Later on during the assessment proceedings the Ld. AO observed that the impounded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment has come up in appeal and Ld. DR while relying upon the basis and reasoning as given by the AO has pleaded for setting aside the order Ld. CIT(A) and restoring that of the AO. It was further argued that since there was so many discrepancies in the books of accounts maintained by the assessee which were not complete, opening cash balance was also not accounted for in the books of accounts and stock register was also not maintained, so AO was justified in rejecting the books u/s 145 and after giving opportunity to the assessee he has correctly recomputed the trading results by treating 20% of the total sales as gross profit of the business and CIT(A) is not justified in deleting such addition made by the AO because cogent reasons have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n hand and cash balance, which was more than the earlier years closing balance as cash sales were there, therefore, Ld. CIT(A) has correctly taken a justifiable view to delete the addition. It was thus pleaded for confirmation of the impugned order. 6. Ld. DR, in order to counter the submissions of Ld. AR, has submitted that reliance on the decision of Delhi High Court in the case of CIT Vs. Smt. Poonam Rani by AR is not appropriate because in the line of business of that assessee was different than the line of business of the present assessee, so ratio of that decision could not be applicable to this case. In this case assessee is dealing with watches and there is every possibility of maintaining stock register even if there is no legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayments of the assessee and made addition to this extent to the income accordingly against which assessee preferred appeal and Ld. CIT(A) deleted such addition made by the AO against which department has filed the present appeal. 7.2. It is well established that after rejecting book result AO has to determine the income giving appropriate basis but from the facts of the present case, we find that AO has just applied 20% of the sales as gross profit to make the addition of ₹ 39,15,783/- without giving any basis for adopting such profit rate. Therefore in our considered view addition made without any basis could not be sustained and Ld. CIT(A) has done the same. Therefore while concurring with the conclusion of the Ld. CIT(A) we upho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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