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2015 (12) TMI 555 - ITAT JAIPUR

2015 (12) TMI 555 - ITAT JAIPUR - TMI - Rejection of books of account - non-maintenance of stock register - G.P. addition - Held that:- As far as the gross profit addition in respect of M/s. S.R. Presstress Industries, Mantri Industries and M/s. Mantri Pole Udyog are concerned, the assessee maintained proper books of account duly supported by the audit report in form 3 CD. The mistakes pointed out by the AO for rejecting the books of account are untenable inasmuch as assessee's taxable profits c .....

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xpenditure disallowable. - Decided in favour of assessee. - ITA No. 230/JP/2014 - Dated:- 9-10-2015 - SHRI R.P. TOLANI, JUDICIAL MEMBER For The Assessee : Shri Manish Agarwal, CA For The Revenue : Shri O.P. Bhateja, Addl. CIT ORDER PER R.P. TOLANI, JM This is an appeal filed by the assessee against the order of the ld. CIT(A)-II, Jaipur dated 2-01-2014 for the assessment year 2008-09 wherein the assessee has raised following grounds:- 1. On the facts and in the circumstances of the case, the ld. .....

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on of gross profit rate of 2.58% as against the gross profit rate of 1.19% declared by the assessee in M/s. S.R. Presstress Industries resulting into trading addition of ₹ 2,94,528/- arbitrarily, thus the addition so sustained deserves to be deleted. 3. On the facts and in the circumstances of the case, the ld. CIT(A) has grossly erred in confirming application of gross profit rate of 6.32% s against gross profit rate of 5.80% declared by the assessee in M/s. Mantri Pole Udyog, resulting i .....

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e the fact that the ld. AO has not pointed out even a single instance wherein personal element is involved and has based his conclusion on mere assumption and presumptions. Thus the disallowance so sustained deserves to be deleted. 2.1 During the course of hearing, the ld. AR of the assessee prayed as under:- (i) Rejection of books of account u/s 145(3) of the Act. (ii) estimation of gross profit rate of 2.58% as against gross profit rate of 1.19% declared by the assessee in respect of M/s. S.R. .....

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d ₹ 60,418/- was made by Ld. AO by applying G.P. rate of 2.58% in case of M/S S.R. Presstress Industries, 6.32% in M/s Mantri Pole Udyog as against the G.P. rate of 1.19% and 5.80% declared by the assessee in case of S.R. Prestress Industries and Mantri Pole Udyog, respectively. 2.3 Ld. Counsel contends that the Ld. AO has erroneously rejected books of accounts on the reason that assessee has not maintained any stock and manufacturing records. Assessee books of accounts are audited, statut .....

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oceedings. Despite voluminous compliance, a wrong finding has been given that proper stock records are not maintained. 2.4 It is contended that when proper books of account along with duly audited by Form 3CD, requisite details before ld. AO then there is no justification for rejecting the books of account and making estimated addition on gross profit. Reliance is placed as under:- (i) CIT vs. Gotan Lime Khanij Udyog, 256 ITR 243 (Raj. (ii) Ajay Goyal vs. ITO, 99 TTJ 164 2.5 Apropos Ground No. 3 .....

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ssity and purpose, thus the expenditure being for business purposes, the disallowance deserves to be allowed. 2.6 As regards to payment of wages through self made vouchers, it is submitted that during the course of assessment proceedings assessee has filed every precise details regarding the wages paid to locally available skilled laborers for work done for manufacturing of PCC poles. The complete details with names and payment vouchers acknowledged by them were also furnished. 2.7 Ld. CIT(A) af .....

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