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TMI Blog2012 (8) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee failed to give satisfactory reason for the fall in its GP. ii. The Ld CIT(A) has erred in facts and in law in deleting the addition made by the A.O. at Rs.21,01,696/- on account of low GP claiming that the addition cannot be made on the basis of comparison despite the fact that the assessee failed to explain the various discrepancies pointed out by the AO iii. The ld. CIT(A) has erred in facts and in law in rejecting the action by the AO to reject the books of accounts despite the various discrepancies pointed out by the AO in its production and selling figures, thereby ignoring the ratio of the decision of the Hon'ble Supreme Court in the case of CIT Vs. HM Esufali H.M Abdulali 90 ITR 271. iv. The ld. CIT(A) has erred in facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l before the CIT(A). CIT(A) vide order dated 27-10-2009 deleted the addition made by the AO for the reason that the AO had not pointed out any material defects or deficiencies in the books of accounts. The rejection of books predominantly was based on comparison with another firm and in the absence of any defects pointed out in the books the rejection of books of accounts was not justified. He further observed that in the assessee's own case there is wide fluctuation in GP from year to year. This fluctuation has been accepted by the department. Aggrieved by the decision of the CIT(A) the Revenue is now in appeal before us. 6. Before us, it was contended by the learned DR that the AO had analyzed the data of firms involved in similar activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimated by the AO. The assessee has also placed on page no.20 of the paper book, the month-wise power consumption. The ld.AR submitted that in A.Y.2004-05, addition on account of GP was made by the AO but the same was deleted by the CIT(A). The department has accepted the decision of the CIT(A) and has not preferred appeal before the ITAT. He placed on page no.57 to 60, the copy of the CIT(A) order for A.Y.2004-05. He therefore urged that the order of the CIT(A) be upheld. 8. We have heard the rival submissions and perused the material on record. The factual matrix of the case is that the AO observed fall in GP as compared to A.Y.2003-04 and that of industry average. He also made comparison of GP of the assessee with that of M/s.Deepak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has suppressed any production or made any sales outside the books of accounts. The observation of the AO is that there is minimum suppression of production of 50,000 kg. of yarn is based on presumption and not on the basis of any cogent evidence or supporting documents. The assessee has produced complete books of accounts supported by bills vouchers and also day-do-day stock book. The AO has not pointed out any defect or omission in the books of accounts and other documents produced before him. The AO has rejected the books of accounts of the assessee based on the book results of another firm. It is the assessee's submission that it manufactures grey cloth which is used for dress material whereas the grey cloth manufactured by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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