9911796707
TMI Blog2015 (4) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... AO called upon the assessee to produce books of account and other relevant documents in support of the claims made in the return of income. There was no proper co-operation from the side of the assessee inasmuch as only part of the books were produced. Several notices were issued, but, of no avail. The AO observed that the assessee failed to produce cash book and other relevant details which required verification. It was also seen that there was no confirmation of accounts of certain parties, such as, Prashad Iron Traders, to whom case cash payment of Rs. 5 lac was made; KPS Steels, a debtor, from whom large amount of cash was received; Krishna Steel Traders, to whom huge amount of cash was paid. In view of the above discrepancies and non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details in support of the expenses, etc., claimed. The same position continued even before the learned first appellate authority inasmuch as the assessee admitted that it was not possible to do so because of the closure of its business and the case being before BIFR. Under such circumstances, we uphold the rejection of books of account by the authorities below. 5. The next issue is about the determination of the gross profit rate to be applied after rejecting the books of account. Ordinarily, the gross profit rate of the immediately preceding year constitutes a good guide for adoption in the succeeding year. If, however, the facts justify a higher or lower GP rate in the current year from the one that was there in the preceding year, then, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14,56,585/-" 7. Invoking the provisions of section 41, the AO made addition for the said sum of Rs. 14.56 lac. The ld. CIT(A) deleted this addition by observing that such type of disallowances were not covered u/s 41 of the Act. 8. We find that the auditor of the assessee pointed out the above referred irregularities in the payment of statutory liabilities, which called for disallowance, if any, under section 43B or the other relevant provisions of Chapter XVII-B of the Act. Merely because the AO mentioned a wrong section in making the disallowance cannot be a ground to delete the addition, if the facts otherwise justify the sustenance of addition under some other appropriate section. As the ld. CIT(A) has failed to consider the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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