TMI Blog2015 (6) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... @ 44.79%, - CIT(A) has applied G.P. rate @ 48% and reduced the total addition to the tune of ₹ 4,99,081/- by rectifying the order U/s 154 r.w.s. 250 - Held that:- The finding based on past history and not submitting the stock register before the Assessing Officer but no solid reasons have been assigned by the ld CIT(A). Both the lower authorities have not pointed out any defect in the books of account. The books of account has been audited under the Income Tax as well as Companies Law. The case law relied by the ld AR in the case of Malani Ramjivan Jagannath Vs. ACIT (2006 (10) TMI 145 - RAJASTHAN HIGH COURT) is squarely applicable. As per Income Tax law, in Section 2 (12A) books of account includes ledgers, day-books, cash books, account-books and other books, whether kept in the written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro-magnetic data storage device. The Hon'ble Delhi High court in the case of CIT Vs. Jack Elegance Exports (2010 (4) TMI 84 - DELHI HIGH COURT ) has held that no provision either in the Act or in the Rules requiring an assessee carrying business of nature, to maintain the stock register as a part of its ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that the assessee is a manufacturer and trader of medicines. There was search seizure operation on 27/08/2008 in the case of Mittal Group to which the assessee belongs was carried on. The group is engaged in wholesale trading/C F agent of medicines/pharmaceuticals. The assessee had filed return of income for A.Y. 2007-08 on 30/03/2009 declaring loss of ₹ 21,88,740/-. The case was scrutinized U/s 143(3) of the Act. Various notices were issued to the assessee from time to time. The Assessing Officer observed that the company was incorporated on 26/5/2004. Its authorized capital was 10 lacs and paid up capital was 7,76,700/- comprising of 77,670/- equity shares of ₹ 10 each. Shri Radhey Shyam Mittal and Shri Atul Burman are Directors of company. The assessee was asked to produce the books of account consisting of cash book, ledger, general bank book, sale and purchase vouchers, expenses vouchers, stock register, during the course of assessment proceedings, which were not produced before the Assessing Officer on the pretext that there was a difference between Directors and books of account are in the possession of Shri Atul Burman and books were maintained on compute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was definitely some dispute between the directors on the issue of books of account. However, circumstantial corroborated facts indicate that the appellant was prevented by sufficient cause for production of books of accounts and the case of appellant is covered under clauseb of rule 46A(1) of IT Rules. Keeping in view above facts as also case laws relied upon by the appellant, the additional evidence furnished by the appellant are accepted. 4. Now the assessee as well as the revenue are in appeals before us. The Ld. A.R. for the assessee has submitted that no incriminating documents were found during the course of search. The scope of assessment U/s 153A of the Act is limited to some incriminating documents/evidence found as a result of search. The assessee filed its regular return U/s 139(1) of the Act on 31/10/2007 and notice of selection for scrutiny U/s 143(2) of the Act could be issued latest by 30/09/2008, which was not issued in the case of assessee. Therefore, the assessment of assessee is deemed as completed U/s 143(1) of the Act. After the assessment deemed completed U/s 143(1) of the Act for the year, the department carried out search and seizure operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the sale and purchase, non-maintenance of stock register lost its significance so far as arriving at GP is concerned. When all the data and entries made in the trading account were not found to be incorrect in any manner, there could not have been any other result except what has been shown by the assessee in the books of account. The ld AR further drawn our attention on business results from A.Y. 2005-06 to 2007-08 and argued that during the year, not only sale but GP has increased from 40.35% to 44.79%. The sales have increased more than double from A.Y. 2005-06. The assessee has been dealing in medicine and G.P. margin in each kind of medicines remains different. There is throat cut competition in the medicine business, therefore, he prayed to delete the addition confirmed by the ld CIT(A). He further argued that on non maintenance of stock register, the book result cannot be rejected U/s 145(3) of the Act for which he relied upon the decision in the case of CIT Vs. Jas Jack Elegance Exports 324 ITR 95 (Delhi), therefore, rejection of book result U/s 145(3) of the Act is not justified. He further relied upon the following case laws on this issue:- (i) Haridash Parikh Vs. IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account includes ledgers, day-books, cash books, account-books and other books, whether kept in the written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro-magnetic data storage device. The Hon'ble Delhi High court in the case of CIT Vs. Jack Elegance Exports (supra) has held that no provision either in the Act or in the Rules requiring an assessee carrying business of nature, to maintain the stock register as a part of its account has been brought to notice. The other case laws referred by the assessee on rejection of book and maintenance of stock register are also squarely applicable. Thus, we hold that the addition confirmed by the ld. CIT(A) is not justified. 6.2 The ld AR has challenged the proceeding U/s 153A of the Act in his argument and submission but no technical ground has been raised by him before he ld CIT(A) as well as before us even in additional ground of appeal. Therefore, this Bench is not required to express its opinion on this issue. Accordingly, we allow the assessee's appeal and dismiss the revenue's appeal. 7. In the result, the assessee's appeal is allowed and appeal of the revenue is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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