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2007 (4) TMI 392 - ITAT DELHIMethod of accounting - rejection of books of account assessee has not maintained stock register - printing of lottery ticket - consumption of raw-material during the year could not be verified - estimated the GP at 37.05 per cent as against GP of 35.05 per cent - HELD THAT:- Assessee was engaged in printing of lottery ticket, and was not undertaking any manufacturing or production process where numerous raw materials are used in the process and quantitative records regarding various raw materials consumed in the manufacturing process is required to be kept to ascertain the correct cost of production and resultant G.P. thereon. The only raw material used by the assessee was paper, the quantity of paper purchase was duly verifiable from the purchase bills, the quantity of paper used was duly verifiable from the sale of lottery ticket, thus the resultant quantity was the closing stock. In all the preceding years also the assessee was not maintaining any such records. The contention of the ld. AR that unless there are change in the facts and circumstances, the department should not take contrary view, is supported by the decision in the case of Radhasoawmi Satsang v. CIT[1991 (11) TMI 2 - SUPREME COURT], wherein Hon’ble Supreme Court held that if there is no change in the facts, different conclusion is not warranted. Even though doctrine of res judicata does not apply to the proceedings under the Income-tax Act, at the very same time it is clear that unless there is a change of circumstances, the authorities will not depart from their previous decisions at their sweet will in the absence of material circumstances or reasons for such departure. Thus the rule of consistency which applies to the income-tax proceedings has to be followed. The department has completed the assessment under scrutiny process and the non-maintenance of the stock register was never the made ground for rejecting the books of account or estimating the G.P. at rate higher than the rate declared by the assessee. Thus, we do not find any merit in the action of the lower authorities in rejecting the book results merely because the assessee has not maintained stock register, without pointing out any specific defect in the books of account, of any nature whatsoever, as discussed. Disallowance of motor-car, conveyance and travelling expenses - HELD THAT:- We found that on an ad hoc basis, the Assessing Officer has disallowed 1/5th of the total expenses incurred both at Delhi and Bangalore, on the plea that no log book or register was maintained to justify that car was entirely use for business. We found that partners of the assessee firm was residing at Delhi, therefore, if any disallowance is to be made for non-business purposes and on account of personal use by the partners, the same is required to be confined to the expenses incurred at Delhi Unit. We, therefore, direct the Assessing Officer to restrict the disallowance to the extent of 1/5th, with respect to the expenses incurred on Delhi Unit. As the partners were not residing at Bangalore, no disallowance on account of personal use by the partners are warranted in respect of expenditure booked at Bangalore Unit. We direct accordingly. In the result, the appeal of the assessee is partly allowed in terms as indicated hereinabove.
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