TMI Blog2015 (8) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... se qualitative record was not maintained and on this premise, the books of accounts could not have been rejected. It is also an admitted fact that mustard seed is only single commodity used by the assessee for manufacturing of mustard oil and the Tribunal noticed that the assessee filed yield percentage for two months before the AO in which no discrepancy was found by the AO. The Tribunal has found that the production of mustard oil is a continuous process and the seeds are put into the milling for continuous oil production. The Tribunal has further found that 80% of its mustard oil is by way of trading sale and neither discrepancies were noticed by the AO in either purchase or sale nor any sale or purchase, found unrecorded. The Tribunal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and oil cake from mustard oil and sale thereof. It is claimed that the assessee maintains complete books of accounts supported by supporting material and accounts are audited. The assessee is also maintaining complete details of production of edible oil and stock register/production register in quantitative details of the trading account, which was placed before the Assessing Officer (for short, 'AO'). 4. During the course of assessment proceedings, the AO, while perusing the stock register, found that there were certain discrepancies mainly (i) that the stock register/ production register are not maintained in terms of quality wise and in the absence of quality of seeds, proper/actual analysis of yield of edible oil and oil ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of accounts have rightly been rejected, however, reduced the trading addition by adopting GP Rate of 1.75% upholding the addition of ₹ 2,80,383/- in the Assesssment Year 2008-09 and GP Rate of 1.50% upholing the trading addition of ₹ 8,82,962/- in the Assessment Year 2009-10. 7. Both the AO as well as the assessee carried the matter in further appeal before the Tribunal who accepted the contention of the assessee that the manner in which the record was maintained, the books of accounts could not have been rejected and accordingly even the trading addition, which was sustained and upheld by the CIT(A), was deleted. Hence this appeal. 8. Ld. counsel for the Revenue contended that when both the AO as well as CIT(A) fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commodity used by the assessee for manufacturing of mustard oil and the Tribunal noticed that the assessee filed yield percentage for two months before the AO in which no discrepancy was found by the AO. The Tribunal has found that the production of mustard oil is a continuous process and the seeds are put into the milling for continuous oil production. The Tribunal has further found that 80% of its mustard oil is by way of trading sale and neither discrepancies were noticed by the AO in either purchase or sale nor any sale or purchase, found unrecorded. The Tribunal also found that the books of accounts had been maintained in the same manner as in the past and the assessee cannot be expected to stop the plant as and when the new lot of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be collected by the AO who makes assessment of an assessee. As pointed out above, merely because there is some deficiency of quality wise record in the books of accounts, or merely because of rejection of the books of accounts, it does not mean that it must necessarily lead to addition in the return of income of the assessee. As noticed earlier, even the AO estimated the income by making estimated addition by applying a particular GP Rate so also the CIT(A) reduced it further. Therefore, these two authorities even while resorting to best judgment had no basis for coming to the conclusion reached and even in a case of estimated/adhoc addition, prima-facie, some material is required to be brought on record. The revenue has ample powers under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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