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2016 (7) TMI 453 - ITAT KOLKATADetermination of Profit rate - @ 10% by CIT(A) as against 42.48% determined by AO - books of accounts not produced - Held that:- We find that the accounts of the assessee were duly audited and no adverse inference was drawn by the auditor. The books of accounts could not be produced before the ld. AO as the assessee’s unit had been taken over by the lending institution. The entire unit including its assets and the books of accounts were in the possession of the bank. The ld. AO was duly aware of this fact and accordingly had also issued summons u/s 131 of the Act to the bank but despite that they have not produced the books of accounts. In such a situation, in our opinion, adverse inference cannot be drawn against the assessee on the ground that books of accounts were not produced by the assessee. We find that asking the assessee to produce the books of accounts in these circumstances would only result in impossibility of performance. The legal maxim ‘LEX NON COGUT AD IMPOSSIBLIA’ – a law cannot compel a man to perform an act which he cannot possibly perform would come to the rescue of the assessee. Adoption of preceding year’s gross profit would only result in absurdity as rightly pointed out by the ld. CITA. We find that the assessee had declared profit at 8.42% in its return based on audited data. We find under these circumstances, the revenue had to place the complete reliance on the audited financial statements for the purpose of determination of total income. The ld. CIT-A had estimated the total income at 10% of turnover. However , we, in our considered opinion, in the facts and circumstances of the case, especially considering the state of affairs in which assessee is placed, feel that adoption of profit at the rate of 9% of turnover would meet the ends of justice. The ld. AO is directed to adopt 9% of turnover as income of the assessee as against 42.48%. Accordingly the grounds raised by the revenue are dismissed and cross objections of the assessee are partly allowed.
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