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TMI Blog2017 (12) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... to have considered the ratio of the decisions of the Hon'ble Supreme Court in the case of Chuharmal Vs.CIT (1988) 172 ITR 250 (SC) and Hon'ble High Court of Madras in the case of Coimbatore Spg. & Wvg. Co. Ltd. Vs. CIT (1974) 93 ITR 375 (Mad). 5. The Ld. CIT(A) failed to take cognizance of the fact that assessee did not bring any direct or circumstantial evidence to prove that the statements given to the banks are motivated. 6. The Ld. CIT(A) ought to have confirmed the addition of unaccounted investment in stock of Rs. 23,59,339 for the reasons elaborately discussed in the statement of facts. 7. The Ld. CIT(A) ought to have sustained the addition of Rs. 2,74,153 and Rs. 8,69,416 towards suppression in gross profit since AO has followed well established procedure in adopting the average of gross profit. 2. At the outset, it may be noticed that under Rule 8 of the Appellate Tribunal Rules, 1962 the parties to the dispute have to file the grounds by making them concise. In other words, they should not be argumentative. Quoting of case law and referring to facts in detail, more particularly filing statement of facts before the Tribunal is contrary to the said rule. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, which means that both the stock reported by the bank and recorded in the books of accounts are based on the cost price only. It was thus concluded that the difference in value of stocks was only because of the difference in quantity of stock and not because of inflated value. 4. In this regard, he observed that ordinarily the books of accounts are presumed to be true and correct unless proved otherwise. He further observed that the onus is upon the assessee to prove the facts correctly since the statement of stock as well as entries in the books of accounts are within the personal knowledge of the assessee. He also relied upon the decision of Hon'ble Supreme Court in the case of Chumanmal (172 ITR 250), wherein it was held that statutory principle of common law jurisprudence embedded in section 110 of the Evidence Act could be applied to the taxation proceedings. In the opinion of the Assessing Officer, the onus is heavily upon the assessee and if the assessee alleges that the bank statement is incorrect, then he has to establish the same by bringing on record some direct or circumstantial evidence and he cannot get away just by making a statement that it was to avail higher ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted during the entire financial year 2010-11. It was thus contended that no addition can be made merely because of the difference in the value of stock furnished to the bank for obtaining OD facility. 7. As regards the alleged suppression in gross profit, it was contended that the fall in rate of gross profit, compared to the earlier year was only 0.37%. Profit rate varies from year to year and in fact the assessee has declared higher rate of profit in the succeeding year. Thus, no addition is maintainable by averaging the gross profit declared in different years. 8. It may not be out of place to mention that the A.O. has estimated the gross profit on unaccounted sales, referable to the difference in stock (closing stock as disclosed to the Andhra bank and the stock mentioned in the books of accounts) and accordingly added a sum of Rs. 8,69,416/-. In this regard, the assessee contended that the addition is unwarranted since it is merely based on the stock statement given to the bank though the fact remains that there was no suppression of stock, which could have been sold. 9. The Ld. CIT(A) observed that the stock shown in the bank account was merely to satisfy the drawing pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any line of business. However, taking into consideration, the fact that there was certain deficiencies in the maintenance of books of accounts, the Ld. CIT(A) directed the A.O. to estimate the profit at 36.50%, in line with the profit admitted in the immediately preceding year. 11. Aggrieved by the order of the Ld. CIT(A), revenue is in appeal before the Tribunal. Ld. D.R. strongly relied upon the order passed by the A.O. to submit that the facts, which are within the personal knowledge of the assessee cannot be proved by the A.O. and he is entitled to take a reasonable view in the circumstances of the case. Since the assessee admittedly claims to have filed wrong statement before the bank authorities, the burden is upon the assessee to prove that the quantitative particulars and the rate mentioned therein to the bank authorities, is not correct as otherwise addition is maintainable and profit thereon can be estimated on the ground of deemed sale. Similarly, with regard to the estimate of profit, by averaging 3 years gross profit rate, the Ld. D.R. submits that the procedure followed by the A.O. is a well established procedure and the Ld. CIT (A) should not have substituted the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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