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TMI Blog2015 (10) TMI 2596X X X X Extracts X X X X X X X X Extracts X X X X ..... rtified copy of authorization u/s 253 of the Act of CIT Central III Kolkata to prefer the appeal together with the proposed grounds of appeal signed by the Learned CIT Central III Kolkata. This is nothing but the Learned CIT suggesting to the Learned AO to raise the grounds of appeal. Hence no valid grounds of appeal were filed before us by the revenue. The grounds of appeal signed by the CIT Central III Kolkata which were suggested by him to the Learned AO for onward filing before us are as below:- 1. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in holding rejection of books of accounts and estimation of profit of unit II improper without proper appreciation of the fact brought on record that the auditor has certified in their report on 31.8.2006 much after books of accounts were alleged to have been destroyed by fire on 18/5/2006 that various books of accounts were examined. 2. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in holding rejection of books of accounts and estimation of profit of unit II improper without proper appreciation of the fact brought on record that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tipulated in the listing agreement, wherein limited review report is to be submitted by the auditors every quarter to the stock exchange and accordingly claimed that the entire audit work was over prior to the date of fire on 18.5.2006 and hence the tax auditor was right in stating that he had examined cash book, purchase register, sales register, stock register, journal register etc in Form No. 3CD. However, the Learned AO did not entertain these arguments and proceeded to reject the books of accounts and determined to estimate the net profit of Unit II @ 10% of turnover and determined the profits of Unit II at Rs. 9,24,41,829/- and granted deduction u/s 80IB of the Act @ 30% thereon. On first appeal, the assessee reiterated its arguments and also stated that similar addition on estimated basis made by the Learned AO for the Asst Years 2003-04 ; 2004-05 & 2005-06 by rejecting the books of accounts due to various irregularities , the Learned CITA and ITAT had restored the book results and held the rejection of books of accounts by the Learned AO as invalid. The assessee also stated before the Learned CITA that the conclusion of the Learned AO that profit declared in Unit II was les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it (Trading) 2.75% However, in order to make the figures of both the manufacturing units comparable, the expenses like preliminary expenses, loss on sale of assets, donation and depreciation is to be eliminated, so that correct gross profit can be derived. As such the comparable figures are as under:- Unit II Unit III Manufacturing Profit as per P/L A/c 2,61,20,179 8,04,83,919 Add: Loss on sale of fixed assets 2,06,070 - Add: Donation & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rkings and relying on earlier year ITAT order, the Learned CITA held that the action of the Learned AO in rejection of books of accounts and estimation of profit of Unit II as improper and directed the Learned AO to accept the book results as such. Aggrieved, the revenue is in appeal before us. 5. We have heard the rival submissions and perused the materials available on record. The Learned AR provided the net profit computation chart and pointed out the error committed by the Learned AO in the said computation which is reproduced below:- Net profit rate computed by Learned AO Turnover of Unit III &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Net profit % 1.04% The other comparative chart is the same as what is reproduced in the Learned CITA order. 5.1. We find that the eligibility of the assessee to claim deduction u/s 80IB of the Act in respect of profits derived from Unit II and Unit III has not been disputed by the Learned AO. We find that the books of accounts were destroyed due to fire that broke out in the business premises of the assessee on 18.5.2006 and hence the assessee had to heavil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No.1836/Kol/08 A.Y 2005-06dt. 21.8.09 "6. At the time of hearing before us, the ld.DR heavily relied on the orders of the AO and further contended that the assessee has disclosed net profit ratio at 14.49% from Unit-III and net profit at 2.88% from Unit-II. Therefore, the assumptions made by the AO in the assessment order are fair and reasonable. 7. On the other hand, the ld. Counsel, appearing on behalf of the Assessee, has reiterated the submissions made before the revenue authorities and further contended that the contention of the assessee as well as the DR that the net profits of Unit No.III was at 14.49% and Unit No. II was 2.88% is not correct but in fact, the net profit ratio of Unit No.III and Unit No.II are at 15.52% and 14.89%. he further substantiated this by submitting the following calculation: UNIT-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Net profit (Manufacturing) 14.89% Based on the above submissions of the assessee, the ld.CIT(A) has rightly allowed the claim of the assessee. Therefore, he requested to uphold the same. 8. After hearing the rival submissions and on careful perusal of the materials available on record, keeping in view of the fact that the revenue could not contradict the submissions of the assessee as well as the observations of the ld.CIT(A) in the impugned order, we find no infirmity in the orders of the ld. CIT(A). Therefore, we confirm the same and dismiss the appeal of the Revenue. 9. In the result, the appeal filed by the Revenue is dismissed." Respectfully following the decision of the Hon'ble Delhi High Court and the coordinate bench decision of the Tribunal in assessee's own case for immediately preceding assessment year, we find no infirmity in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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