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2004 (5) TMI 586 - itat Amritsar

2004 (5) TMI 586 - itat Amritsar - [2005] 147 TAXMAN 97 (ASR.) (MAG.) - IT APPEAL NOS. 808 AND 810 (ASR.) OF 1996 AND 617 (ASR.) OF 1997 - Dated:- 31-5-2004 - U.B.S. Bedi, Judicial Member, And R.S. Syal, Accountant Member For the Appellant : Sudhir Sehgal and Virinder Sachdeva For the Respondent : S.C. Pahwa ORDER Per U.B.S. Bedi, Judicial Member. - These three appeals of the Department with respect to two assesses are directed against the order passed by the learned CIT(A), Bhatinda in the case .....

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ng Officer while applying profit rate of 39.67% as against 11.45% shown by the assessee against which the assessee preferred appeals and while objecting to such addition, it was pleaded that the Assessing Officer has made the addition by applying G.P. rate of 39.67 per cent merely on presumption and without any basis. It was also submitted that applications of the G.P. at 39.67 is against the past history of the assessee and was also not based on any comparabable case. In the assessment order, t .....

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e submitted that the same have not been maintained by the assessee as no stock register has been maintained by the assessee showing the quantity-wise details of purchases and sales. The Assessing Officer impounded the books of account under section 131 on 21-12-1994 and extracted quantity-wise details of different items from the purchase and sale bills. These details were confronted by the Assessing Officer to the assessee and in response to which the assessee filed reply. After examining the re .....

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ssing Officer computed the difference in value at ₹ 6,75,588 as per the details given at page 3 of the assessment order. The Assessing Officer also found that the assessee has shown opening stock at ₹ 9,24,310 and after adding the difference in the sales and purchases the Assessnig Officer found that the closing stock with the assessee shuold have been at ₹ 15,99,898 against the closing stock of ₹ 9,41,450 shown by the assessee leading, to difference of ₹ 6,75,588. .....

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g reasons : (i)Absence of stock tally. (ii)Purchases are more than sales. Those will be reflected in the closing stock. (iii)The GP rate of the earlier years is the same and also in this line of business the G.P. rate is comparable. 3. Secondly, it was submitted that the value of the opening and closing stock has been taken at cost price. However, if any item is not sold within one year the value substantially goes down because of absolence and also getting the items out of fashion. It was also .....

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ointed out that the purchases and sales are not being correlated but its total quantity of purchases and sales throughout the year have been taken into account after allowing adjustment of opening and closing stock. The Assessing Officer also rejected the assessee's contention regarding the value of opening stock and closing stock is the same. The Assessing Officer also pointed out that the cut pieces which are generated during the course of sales are also being sold out throughout the year .....

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ssing Officer has not been able to pin point any other case in which the G.P. shown is more than the declared by the assessee. It is also seen from the chart of G.P. of various items filed by the learned counsel that the G.P. rate varies from 6.12 per cent to 15.56. Therefore, keeping in view the facts and circumstances of the case in my view the G.P. rate applied by the Assessing Officer at 39.67 per cent appears to be without any basis. It has already been pointed out that the Assessing Office .....

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arable cases. Since the appellant has shown better results both as compared to earlier years and as compared to other comparable cases in my view there was no justification on the part of the Assessing Officer to disturb the book results of the appellant. It is very strange that the Assessing Officer has made huge addition without preserving the basis for the addition. Under these circumstances, the addition made by the Assessing Officer cannot be sustained and, therefore, the same is deleted.&q .....

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s whereas the G.P. rate was shown 11.45 per cent to 11.59 per cent and earlier to the year under consideration the G.P. rate 9.93 per cent to 11.49 per cent has been accepted. Therefore, there was no occasion for the Assessing Officer to make the addition and the learned CIT(A) has rightly deleted the same. It was pleaded for confirmation of the same. 6. After hearing both the sides and considering the material on record we find that the basis and the reasoning as given by the learned CIT(A) in .....

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