TMI Blog2013 (7) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... – On a reasonable estimate the CIT (Appeals) and the Tribunal have not committed any error in taking the figure of sales. Validity of order - orders as passed by the CIT (Appeals) and the Tribunal do not appear suffering from any perversity or from application of any wrong principle - the matter had been of putting a reasonable estimate on the quantum of sales and on the gross profit rate while recording the findings on facts - the authorities have recorded such findings with cogent reasons and on relevant considerations, court do not find any reason to interfere - The decision of Howrah Trading Co. P. Ltd. v. CIT relied upon by the AO is squarely applicable to the facts of the case - court approve the action of the CIT (Appeals) in reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of 32.72 per cent. declared by another concern, viz., Anil Marbles P. Ltd. for the assessment year 1996-97. The Assessing Officer came to the conclusion that the assessee, who was dealing in marble, indulged in suppression of purchase cost of marble blocks and sales of marble and, therefore, the then applicable provisions of section 145(1) were attracted. Accordingly, while rejecting the books of account of the assessee, the Assessing Officer made an addition of Rs. 8,66,725 by applying the gross profit rate of 32.42 per cent. on the estimated sales. The Assessing Officer made the estimate of the sales of the assessee at one and half times the total declared sales plus job receipts and increase in the closing stock. Feeling aggrieved, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 per cent. of the declared amount of sales without indicating any reason for such enhancement and the Commissioner of Income-tax (Appeals) was justified in enhancing the sales to Rs.26 lakhs from Rs. 23.46 lakhs declared by the assessee. The Tribunal further held that the case of Anil Marbles had rightly been distinguished and the gross profit rate of 25 per cent. had reasonably been applied as against 20.6 per cent. declared by the assessee. Consequently, the Tribunal dismissed the appeal filed by the Revenue. Hence, this appeal. We have heard the learned counsel for the parties and have perused the material placed on record. It is contended by the learned counsel for the Revenue that once the rejection of books was upheld by the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has not disputed the fact that the sales declared by the appellant company has been accepted by the sales tax authority. Further, it is a fact on record that the Assessing Officer has not brought single instance on record to show that the appellant has indulged in sales out of books of account. Further, in my view, the surrender made by the compared case of M/s. Anil Marbles P. Ltd. cannot also be taken into account for estimating the sales of the appellant company because, during the course of survey, some serious defects must have been noted by the survey team in the case of that company for which the said company surrendered some amount. Admittedly, there is no such serious defects which need such heavy estimate. 9.2 As regards t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as the quantitative aspect is concerned. The decision of Howrah Trading Co. P. Ltd. v. CIT relied upon by the Assessing Officer is squarely applicable to the facts of this case. Apart from that, we have already upheld the rejection of book results under similar circumstances in other cases. We, therefore, approve the action of the learned Commissioner of Income-tax (Appeals) in rejecting the book results. Coming to the amount of trading addition, we find that the facts of Anil Marbles Pvt. Ltd. applied by the Assessing Officer are not applicable to the instant case as rightly pointed out by the learned Commissioner of Income-tax (Appeals) in paragraph 9.1 of the impugned order. The Assessing Officer has increased the turnover by 50 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantum of sales out of books of account, his estimate more than one and half times the sales declared by the assessee could not have been considered justified. On a reasonable estimate, the Commissioner of Income-tax (Appeals) and the Tribunal have, in our opinion, not committed any error in taking the figure of sales at Rs. 26 lakhs and not beyond. So far as the gross profit rate was concerned, the Assessing Officer was obviously in error in taking the case of Anil Marbles Pvt. Ltd. as a comparable one, while omitting to consider the basic difference that the said company had worked for whole of the year whereas the respondent-assessee had worked only for a period of about nine months during the year in question, as the commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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