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TMI Blog2015 (9) TMI 1180X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on facts of the case in holding that books of accounts maintained in computerized environment were accurate and reliable even though they were not supported by primary documents like sale bills and vouchers prepared at retail outlet at the time of sale. iii. Ld. CIT(A) has erred in law and on facts of the case in disallowing rejecting of books of accounts by the Assessing Officer without examining the primary document like daily sales/stock sheet prepared manually at each shop by the staff which were claimed to have been prepared. iv. Ld. CIT(A) has erred in law and on facts of the case in shifting the onus on the Assessing Officer when there was failure on the part of the assesse in discharging its onus to prove the veracity of figures reflected in books of account with primary documents like one cash voucher prepared manually at each shop to record day's sale and manual sales/stock sheet prepared daily by staff at each shop. v. Ld. CIT(A) has erred in law and on facts of the case in deciding the case without adhearing to the principles of natural justice? Was he justified in deciding the appeal against department considering the arguments of assessee without asking for thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of Trading A/C except G.P. (-) Closing Stock/(1- 6.73%) Or Total of debit items of Trading A/C except G.P. (-) Closing Stock/93.27%=Estimated sale by applying G.P. Rate of 6.73% Month Estimated Sales by applying G.P. rate of 6.73% Total of debit items of trading a/c except G.P. (-) Closing Stock / 63.27%) Sales shown by the assessee Difference i.e. undisclosed sales (Col. 2- Col. 3) 1. 2. 3. 4. Oct. 04 25441784-9300972/93.27%=17305470 15525555 1779915 Nov. 04 25266722-8974662/93.27%=17467632 15723147 1744485 Dec.04 26306939-10944481/93.27=16470953 13650361 2820592 Jan. 05 26483160-5870010/93.27%=22100515 18731174 3369341 Feb.05 23034167-4109605/93.27%=20290085 17266494 3023591 Total 93634655 80896731 12737924 Being aggrieved by this assessment order, an appeal was filed before the CIT(A), who after considering the entire facts of the case allowed the appeal vide para 5.3 of his order, which reads as under: "5.3 I have considered the above submissions of the counsel of the appellant and the facts stated in the assessment order by the AO. It is observed that primary reasons given by the AO for rejection of the books of account and conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss profit. As per the policy of Excise department, since the license is granted on yearly basis, the" appellant tries to clear its stock anyhow by the close of the year. Merely because the appellant has sold the goods at a loss and such sales are duly reflected in the books of account and other Excise registers, the AO cannot brush aside such book results supported by relevant evidence. The AO cannot step into the shoes of a businessman and try to dictate as to how the business is to be carried out. It is the prerogative of a businessman to decide about the selling rate vis-a-vis business exigencies of the situation. 5.5 Regarding the observation of the AO that the Excise records have not been produced by the appellant, it has been vehemently argued by the appellant that the Excise records were submitted before the Excise authorities at the end of the year and this fact has also been confirmed by the Excise Authority to the AO. The AO cannot presume that the appellant might have a copy of the same merely because the Excise Officer thinks so. The appellant has produced complete stock registers before the AO in which no mistake at all has been pointed out towards the maintenance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd even one instance to show that sale rate recorded in the books of account was less than what Was actually charged by the appell.ant - from its - customers. The businessman is the best judge to determine the business expediency as to whether it is more profitable to reduce the sale price and increase the turn over or to maintain the higher profit despite decline in sale. Market forces decide whether it is beneficial to reduce the selling rate or stick to the high gross profit depending on whether it is a sellers market or it is a buyer's market. The assessment must not be based on mere suspicion or pure guess but on legitimate materials from which a reasonable inference of having earned income during the accounting year can be drawn. 5.7 Keeping in view the above ruling given by the Hori'ble ITAT and the Id. CIT(A)'s finding, the trading results as declared by the appellant cannot be brushed aside merely because of the reason that the gross profit rate has varied in certain months and the day to day sale vouchers have not been maintained by the appellant. It appears that the AO has failed to appreciate the column and contents of the daily sale statements which contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resumption which carried no weight. Therefore, I have no other option but to delete such addition and the AO is hereby directed to allow consequential relief to the appellant. Hence ground Nos. (i) to (viii) are allowed." Being aggrieved by this order, the Revenue is before us with the present appeals. 3. The ld. Senior DR vehemently argued that the CIT(A) was not justified in holding that the books of account cannot be rejected, inasmuch as, the appellant had failed to furnish the stock register maintained at each shops and sales bills. He further submitted that the submissions made by the Assessing Officer were not considered by the CIT(A) and hence he submitted that the order passed by the learned CIT(A) was in gross violation of principle of natural justice. 4. On the other hand, the learned Authorized Representative of the respondent assessee had relied on the orders of the lower authorities. 5. We have heard the rival submissions and perused the material on record. We find that the Assessing Officer had proceeded to estimate this suppressed sales on the ground that the gross profit was negative during the months of October, 2004 to October, 2005 and the Assessing Officer ..... 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