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2019 (12) TMI 1475 - AT - Income TaxDelay of 144 days in filing the cross objection by the assessee - assessee has submitted that the Director of the assessee company, who was handling the tax matters was not fully aware of its right to file the cross objection and remained under the impression that the assessee has already succeeded in the first appeal and hence no further action was required - HELD THAT:- When the assessee was already proceeded against ex parte and the matter was fixed for ex parte arguments, the assessee could only participate in the proceedings for which the matter was fixed. Hence except the arguments on the appeal of the revenue, the assessee cannot be allowed to file any pleadings or cross objection without setting aside the order dated 4th November, 2019 whereby the assessee was proceeded ex parte. Despite sufficient time availed by the assessee and adjournment taken by the ld. A/R of the assessee, the assessee did not take any step for setting aside the ex parte order dated 4th November, 2019. Further, the assessee has decided to file the cross objection only after the assessee was proceeded ex parte. Therefore, in these facts and circumstances we are not convinced with the explanation for cause of delay in filing the cross objection as the assessee was otherwise not allowed to go behind the stage of proceedings fixed for the day. Hence in the facts and circumstances of the case, the cross objection filed by the assessee is dismissed being not maintainable as well as barred by limitation. Estimating the income by applying the G.P. rate - Rejection of books of accounts - increase in the G.P. just on the basis of the discrepancies pointed out in the accounts - increase in the GP just on the basis of discrepancies pointed out in the accounts and not for any other reasons up by 0.08% - Declining of profit margin of assessee - HELD THAT:- There is no quarrel on the point that the rejection of books of account under section 145(3) would not ipso facto lead to an addition if the GP declared by the assessee is either better than the past history of the GP declared or in line with the past history. However, in the case in hand, the GP declared by the assessee is neither in line with the past history nor it can be considered as better or reasonable in comparison to the past history of GP declared by the assessee. It is pertinent to note that in the absence of specific exceptional circumstances or adverse economic condition having impact on the trading result of the assessee, a general contention cannot be accepted as a reasonable cause for such decline. However, except the speculative situations which may represent an exceptional year or cycles of ups and downs in various sectors of economy, the ld. CIT (A) has neither considered the relevant specific facts having influenced to the business/trading of the assessee as well as business results of the assessee. Therefore, all these reasons which are general speculation and possibilities cannot be considered as finding of fact. Once the AO is bound to estimate the income, then the past history of the assessee is regarded as a proper and reasonable basis for estimation of income. Accordingly, in view of the above facts and circumstances as well as the binding precedents, we set aside the impugned order of the ld. CIT (A) qua this issue and restore the order of the AO. Appeal of the revenue is allowed and cross objection of the assessee is dismissed.
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