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2020 (2) TMI 1043 - AT - Income TaxRejection of books of accounts - NP rate determination - only reason assigned by AO for making this addition was that the assessee was non-cooperative in the assessment and recovery proceedings in the A.Yr. 2008-09 - AO applied NP of 11.03% on the gross deposits as reduced to 3.66% by CIT- A - HELD THAT:- 'Bank' is not a trading or manufacturing concern so it was not required to maintain any 'Stock Register' as opined by the ld. CIT (A). The Receipts and Advances as made during the banking operations are duly accounted for and are vouched and verifiable. In the circumstances, the observations of ld. CIT(A) regarding non-maintenance of 'Stock', Register is irrelevant in the present case. Authorities Below had failed to spell out as to how the `General. and Common' observations regarding procedural lapses made in the Statutory Audit warranted rejection of the books of banking company and make addition by estimating NP rate which is generally in the case of concerned who engaged in trading and manufacturing activities. Detailed chart of 'Receipts' & 'Expenses' as placed at PB page No.34 & 35, no specific discrepancy what-so-ever could be pointed out in respect of such receipts and expenses. Set aside both the orders of the lower authorities and the matter is restored back to the A.O. to examine afresh in the light of the fact that the observation of internal and statutory auditor was removed by the assessee subsequently as stated by the ld AR. A.O. should also keep in the mind that the assessee being banking company and not a trading or manufacturing concerned so as to estimate the GP or NP on its sales. The A.O. is to decide the issue afresh after giving due and effective opportunity of hearing to the assessee.
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