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Assistant Commissioner of Income Tax, Jhunjhunu Versus M/s Handmade Paper & Board Ind.

Trading addition - rejection of books of account - Held that:- Whatever defects pointed out by the Assessing Officer is not justified, the rejection of books of account U/s 145(3) of the Act. The assessee’s manufacturing processes are so complexed that at every stage, the size, length and width of products changed and also the number of process in the manufacturing of handmade papers but the assessee has maintained proper purchase, sale and other expenses on the basis of bill/vouchers. - Decide .....

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4 lakhs to ₹ 5 lakhs on ad hoc basis. (ii) The CIT(A) has erred in observing that the fall in GP rate and non-maintenance of stock register, were not material even when the facts and circumstances, as detailed by the A.O., justified the invoking of provisions of Section 145(3). (iii) The CIT(A) has passed a perverse order in overlooking the fact that the A.O. had estimated the G.P. rate on the basis of the past performance in case of the assessee itself. (iv) The CIT(A) pas passed a perver .....

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the ld CIT(A) when nobody on behalf of the assessee was appeared in spite of service of notice through Registered-A.D.. Against this order, the assessee filed M.A. being M.A. No. 19/JP/2015 and vide order dated 09/10/2015, the Coordinate Bench had recalled order dated 17/10/2014 and fixed the case for hearing on merit. Thereafter, after detailed hearing of the case, we are deciding this appeal on merit. 2.1 The assessee firm is engaged in the business of manufacture and sale of handmade paper d .....

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sale and purchase register and various vouchers, which were test checked by him. The Assessing Officer asked the assessee to produce the stock register to verify the raw material, work in progress and finished goods. It is submitted that the assessee has not maintained quantitative and qualitative stock register of raw material, work in progress and finished goods as the assessee business is as such that it is not possible to maintain stock register on the basis of quantity and quality. It is al .....

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er dated 24/12/2010 has been reproduced by the Assessing Officer on page No. 3 of the assessment order and concluded that books of account was not properly maintained and were not trustworthiness. He further relied on the decision of Hon'ble Supreme Court in the case of S.N. Samasivayam Chettiar 38 ITR 579 for not maintaining of stock register and application of Section 145 of the Act. He further referred Hon ble Bombay High Court decision in the case of Basti Ram Narayan Das Maheshwari Vs C .....

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2008-09 the GP was 23.10%. After considering the assessee s reply, it has been held that the assessee was failed to explain the market forces, which affected the GP rate of the assessee. After considering the past history of the case, the ld Assessing Officer applied GP @ 33% and addition of ₹ 73,94,851/- was made by the ld Assessing Officer. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the appeal partly by .....

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disputed, the inventory of closing stock was also not found to be incorrect, then non maintenance of sale stock register looses significance, so far as determination of GP is concerned. Therefore, neither the rejection of books of account nor the estimation of GP on the higher side was held justified. He further relied on the decision of Hon ble ITAT, Jaipur Bench in the case of Uttam Chuna Pathar Udhyog 64 ITD 460, Hon ble Delhi High Court decision in the case of Smt. Poonam Rani 326 ITR 223 a .....

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The ld DR has vehemently supported the order of the Assessing Officer. At the outset, the ld AR of the assessee has reiterated the arguments made before the ld CIT(A). He has further argued that the assessee had not maintained the stock register and manufacturing process of products manufactured by the assessee are so complicated and number of items manufactured are in number of quantities and there are differences, finished process and also the size, length and width of production is different .....

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