TMI Blog2015 (5) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... by itself cannot be a conclusion to give that assessee is shine away from producing the day-to-day tally. In view of these facts, we see no justification in rejection of books of accounts. The assessee has demonstrated that its yield of rice, bran and faak is as per the industry norm and the GP rate in all the years is favourably comparable. Under these circumstances, it cannot be held that the assessee's book results are unsatisfactory. Merely because a search is carried on it is not automatically meant that assessee is indulging in some nefarious activities. This is the burden of the revenue to prove in this behalf with material and cogent reasons. The ad hoc disallowance, rejection of books and taking support of this fact which we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 9.9.2009, Assessing Officer (AO) made a reference to the Special Auditor under Section 142 (2A), which lead to a report dated 10th May, 2011. 5. The AO after considering the materials on record made addition to the income for the relevant assessment years to the tune of ₹ 19,28,42,391/-. This included 1% of the sale of rice shown in books of accounts for each of the assessment years in question. The relative amounts, to the extent of 1% for various years were added on the ground that the quality wise day to day stock of the rice traded by the assessee was not reflected. The additions made in respect of various years are as follows:- Assessment year Rs. 2002-03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decision ought not have been interfered with by the ITAT, since it was based on an exhaustive appreciation of the circumstances. 8. Learned counsel for the respondents, on the other hand, rely upon the decision of the ITAT and submitted that in the previous assessment years 1999-2000 and 2001-2002, the revenue had accepted the books of accounts as existed as well as the GP rates based on the rice yielding rates disclosed by the assessee. It is submitted that in fact a comparison of the GP rates accepted by the Revenue for previous years, would show that the significantly higher GP rates were disclosed in the concerned assessment years and this itself ought to have prevented the AO from making any alteration. Countering the suggestion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar, if not identical facts. Like in the present case, the assessees in those cases also maintained regular books of accounts, which were duly audited. All statutory registers, mandatory local laws too were kept on regular basis. The sales and purchases documents were regular. In the present case, too, neither AO nor the DRP was able to find fault with these documents. Further, for three assessment years prior to the block assessment of the years concerned, the scrutiny assessment orders accepted both the yield rate and the GP rate declared by the assessee. Apparently, additions made to the GP rate had been challenged successfully by the assessee to the ITAT, which rejected them. The matter thereafter attained finality. 11. We also notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Assessing Officer in this behalf to reject the books is purely based on surmises and conjectures. Based on the surmises and conjectures, ad hoc addition of 1% of sales have been made which also is again a fictional work of guesswork and conjectures based again on already indicated conjectures. Thus, the whole addition is nothing but an interplay of surmises and conjectures arrived at by Assessing Officer to willy nilly make the addition. 9.1 It is not disputed that the assessee's yield commensurate to the industrial GP disclosed by the assessee is comparable and satisfactory. In our considered view, when no palpable inconsistency in the books of account they cannot be rejected merely on the basis of assumption that assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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