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2015 (6) TMI 362 - ITAT JAIPUR

2015 (6) TMI 362 - ITAT JAIPUR - TMI - Rejection of books of accounts - trading addition - Held that:- During the course of search, no incriminating documents were found and seized. The ld Assessing Officer rejected the book result for non-producing of the stock register but various courts has held that non-maintaining of stock register or not producing the stock register before the Assessing Officer is not sufficient ground to reject the Book result U/s 145(3) of the Act.

Further, th .....

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sessee.

G.P. addition by applying 60% rate of total turnover - assessee has shown G.P. @ 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 .....

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ic 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 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 confir .....

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9;s appeal as well as the Revenue are as under:- Grounds of assessee's appeal ITA No. 910/JP/2012 "1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in confirming rejection of books of accounts of the assessee by applying the provision of section 145(3) of Income Tax Act, 1961. 2. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in calculating the amount in his order against addition confirmed. 3. On the facts and in th .....

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ate of 60% applied by the A.O. to 48% and thereby allowing relief of ₹ 18,71,094/- (12% x 15592447), without substantiating the reasons for allowing such relief despite the fact that he has already confirmed the rejection of book profit and books of account." 2. All the grounds of assessee's appeal as well as ground of revenue's appeal are revolving around rejection of books of account of the assessee by applying provisions of Section 145(3) of the Income Tax Act, 1961 (in sho .....

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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 co .....

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d declared G.P. rate @ 62.85% in A.Y. 2005-06 on turnover of ₹ 69.54 lacs against which G.P. rate of 60% had applied in A.Y. 2006-07, under the circumstances discussed in the order of the same G.P. i.e. 60% rate was applied during the current year on account of similar facts and circumstances of the case. Thus, he estimated G.P. at ₹ 32,50,097/-, the difference worked out at ₹ 61,05,371/-. After reducing the net loss declared in the return, net addition of ₹ 39,16,631/- w .....

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noted that the A.O. has asked for producing of books of account during the assessment proceedings and as the books of account were not produced the A.O. applied provisions of Sec. 145(3) of IT Act and determined the income by applying GP rate of 60%. The appellant's case is that the books of accounts were with another director with whom due to some dispute the books of accounts could not be produced at the assessment stage. The appellant has also contended that the non-production of books of .....

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ooks of accounts have not been produced in spite of so many opportunities given at the time of assessment stage and therefore additional evidence by way of regular books of account may not be accepted at the appellant stage. Having considered the above facts, it is noticed 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 .....

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cuments/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 operations on 27/08/2008. In sear .....

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hen no addition can be made in the assessment completed U/s 153A, which has been awaited. He further relied on the following case laws:- (i) ITAT Jodhpur 308/Jd/2013, 22nd July, 2013 93 DTR (Jd)(Trib) 1. (ii) Marigold Merchandise (P) Ltd. Vs. DCIT, ITAT Delhi ITA Nos. 2666 & 2667/Del/2013, 27th December, 2013 (2013) 38 CCH 050 Del Trib. (iii) Gurinder Singh Bawa Vs. DCIT (2012) 28 Taxman.com 328. (iv) Kusum Gupta Vs. DCIT, ITA No. 4873/Del/2009, (2005-06). (v) MFG Automobiles Ltd. Vs. ACIT I .....

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has admitted the additional evidence filed during the course of assessment proceedings. No defects in the books of account had been pointed out by the Assessing Officer except not maintaining the stock register. The books of account were audited by the C.A. under the Income tax Act as well as the Companies Act. The Auditors have not made any qualification in their audit report and have reported that the P&L account first give a true and fair view of the profit of the company. The purchase a .....

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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 ea .....

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llowing case laws on this issue:- (i) Haridash Parikh Vs. ITO 113 TTJ 274 (ITAT Jodhpur). (ii) Avdesh Pratap Singh Abdul Rehman & Bros Vs. CIT (supra) (iii) Ashok Refractories Pvt. Ltd. Vs. CIT (2005) 279 ITR 475 (Cal). (iv) ST Teresa's Oil Mills Vs. State of Kerala 76 ITR 365 (Ker.). He further clarified that there was mistake in the order of the ld CIT(A), which has been rectified by the ld CIT(A), therefore, he filed the revised form No. 36. 5. At the outset, the ld. D.R. has vehement .....

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t U/s 145(3) of the Act. Further, the assessee company is in manufacturing of medicine where Drug Control Act also applicable. According to that Act also, he has to maintain various records in compliance of that Act. It is a fact that no adverse comment had been given by the Assessing Officer on account of any discrepancy in manufacturing of medicines on the basis of search material or any other inquiry made by him. Therefore, the lower authority is not justifying in receiving books U/s 145(3) o .....

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