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2016 (5) TMI 347 - ITAT JAIPUR

2016 (5) TMI 347 - ITAT JAIPUR - TMI - Determination of gross profit rate - Held that:- We find that the assessee has not maintained the stock register as to production of the items being manufactured by the assessee. Hence, the lower authorities have rightly invoked the provisions of section 145(3) of the Act. We further find from the record that Coordinate Bench vide its order dated 9-01-2012 in assessee's own case had made a lump sum addition of ₹ 5.00 lacs against gross profit rate of .....

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ay Malik, Addl. CIT ORDER PER LALIET KUMAR, JM This is an appeal filed by the assessee against the order of the ld. CIT(A)-1, Jaipur dated 11-05-2012 for the assessment year 2009-10 wherein the solitary issue of the assessee is that the ld. CIT(A) has erred in confirming the addition of ₹ 7,90,335/- instead of deleting fully without any basis of justification which is on account of applying higher gross profit rate of 8.95% as against declared gross profit rate of 8.80%. 2.1 At the outset .....

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contact his ld. AR for filing the appeal in time. Thus the delay made in filing the appeal may be condoned. 2.2 The ld. DR vehemently opposed the condonation application of the assessee as to delay in filing the appeal in time. 2.3 We have heard the rival contentions and perused the materials available on record. It appears from the records that the delay of 40 days in filing the appeal is on account of continuous illness of the assessee which was beyond the control of the assessee. The assessee .....

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egislature has conferred power to condone delay by enacting section 5 of the Limitation Act, 1963, in order to enable the courts to do substantial justice to parties by disposing of matters on merits. The expression " sufficient cause " in section 5 is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice-that being the life-purpose of the existence of the institution of courts. A justifiably liberal approach has to be adopt .....

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When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay." Thus, in view of the deliberations of Hon'ble Apex Court in the case of Collector , Land Acquisition vs. Mst. Katiji and Others (supra), the delay is condoned 3.1 Now we take up the appeal of the assessee wherein brief facts of the .....

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on to gross profit of ₹ 3,17,94,415.69 against total sale of ₹ 36,04,94,486.10 with gross profit rate of 8.81% shown in the preceding year i.e. A.Y. 2008-09. The AO considered the return of income filed by the assessee; details filed during assessment proceedings and examined the books of account produced by the assessee with the following bifurcation of three assessment years of the assessee. A.Y. Sales G.P. Percentage 2009-10 50,57,58,331.04 4,44,75,016.95 8.80 2008-09 36,04,94,486 .....

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ost claimed by the assessee before the Department. The AO observed that the assessee is not regularly maintaining the stock register particularly of principal raw material in order to avoid proper verification of the records. In view of these facts, the AO rejected the books of account of the assessee by invoking the provisions of Section 145(3) of the Act and estimated the gross profit rate at 10% which resulted into a trading addition of ₹ 61,00,817/-. 3.2 Being aggrieved, the assessee c .....

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hat the Hon'ble ITAT Jaipur Bench confirmed a trading addition of ₹ 5 lakhs which results in confirmation of a gross profit rate of 8.95% in the previous A.Y. As the matter is covered by the finding of the Hon'ble ITAT the G.P. rate is estimated at 8.95% during this A.Y. which results in a G.P. of ₹ 4,52,65,371/- against the G.P. shown by the assessee of ₹ 4,44,75,016/-. After giving a set off of the G.P. already shown by the appellant a trading addition of ₹ 7,90 .....

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rves to succeed in part. We noted that the ld. CIT (A) has given a finding that stock register was not maintained and, therefore, valuation of closing stock remained unverifiable. Since this is an important factor for deducing the valuation of closing stock, therefore, in our view, the invocation of provisions of section 145(3) was correct. Now the question arises is decline in GP rate. It is seen that turnover of the assessee has been increased substantially. In immediately preceding year, the .....

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n sale price is only 22%. If all these facts are taken into consideration, then it is seen that there was a reasonable cause for fall in GP rate. It is further seen that complete purchase vouchers and sale vouchers are maintained. The sales made by assessee are mainly made to Electricity Board. This is not the case of the department that assessee has not maintained purchase /sale vouchers. All other expenses are also vouched. The job charges paid by assessee are also vouched. A small portion of .....

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