TMI Blog2011 (8) TMI 1219X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 dated 24.11.2006. 2. Brief facts of the case are that the assessee is engaged in the business of manufacturing and trading of Art Silk Cloth. During the year, loss of (-) 15,22,440/- @ 7.18% on sales of ₹ 2,06,54,922/- as compared to GP of ₹ 45,31,010/- @ 9.6% on gross sales of ₹ 471,29,108/- for immediately preceding assessment year has been shown. Thus there was a fall of 16.78% in GP during the year. The assessee was asked to give reasons for such huge fall in percentage. The assessee s reply was as under :- During the relevant year we manufactured specifically Dress Salwar Kameez etc. But unfortunately we made mistakes in finalizing printing design and quality of cloths and in conclusion at the time of sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that the assessee manufactured dresses and salwar kameez whose prints, design quality of cloth were not upto mark i.e. normal kind of materials as well as quality which were very much common in the market. The buyers who purchased the items were leading dealers of textiles like Vipul Textiles, Anchal Fashion, Sahib Fabrics, Ganpati Textiles etc. It was not known how these leading and established business concerns purchased such a lower quality of fabrics from the assessee. Further the sales register does not indicate as how much of the finished products was sold from opening stock and that from manufactured during the year. The assessee also failed to prove that the entire sales made were from the opening stock only and no distinct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was a mistake/defect in the books of accounts through which assessee had manipulated the GP of the business and claimed loss. Books of accounts of the assessee were rejected u/s 145 of the Act and gross profit was estimated @ 16.78% and thereby addition on account of low GP was made of ₹ 34,65,892/-. 4. The assessee went in appeal before ld. CIT(A). During the appellate proceedings before the ld. CIT(A) the argument of the assessee was that it had sold old fashion goods and suffered a clear cut gross loss in sale of opening stock of goods at ₹ 8.01 paise per meter and that amounted to gross loss in percentage @ 21.42%. In support of this contention assessee furnished copy of the purchase register sales register reflect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. After hearing both the parties and perusing the record, we find that in this case the AO has rejected the book results shown by the assessee by rejecting the books and made the GP addition of ₹ 34,65,892/-. The ld. CIT(A) while allowing the appeal of the assessee has also given the finding of facts that book results could not be rejected u/s 145(3) of the Act in this case. We further find that this finding of facts of ld. CIT(A) has not been challenged by the Revenue in the grounds of appeal taken up before us. In the absence of such challenge, the book results declared by the assessee will have to be accepted. This view of ours is supported by the decision of the Tribunal in the case of ITO vs. M/s P.T. Synthetics (supra) wher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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