TMI Blog2011 (12) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961. 3. The facts, in brief, are that the assessee is engaged in retail sale of Indian Made Foreign Liquor (IMFL), Beer and Country Liquor in Vidisha, Bhopal and Bilaspur Districts. During the year, the assessee had shown total sales of ₹ 13.76 crores, which gave a net profit rate of 1.2 %. By observing that sale of the assessee was not verifiable, the AO rejected the books of accounts by applying the provisions of se 145(3) and applied net profit rate of 3 % by estimating sales at ₹ 16.82 crores. 4. By the impugned order, the ld. CIT(A) held that the AO was not justified in rejecting the books of account, which were regularly maintained and not disturbing the declared results by enhancing the net profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the change in Excise policy has resulted in stiff competition in this line of business which has adversely affected profit margins. For this reason also, reliance by the Assessing Officer on the decision of the Jurisdictional High Court in the case of Gendamal Hazarimal may not be very relevant, owing to the changed circumstances. In fact this decision does not advance the cause of the AO as it is actually in favour of the assessee. No defect in the books of account have been pointed out by the Assessing Officer which would justify invoking the provisions of Section 145(3). The facts of the appellant s case are squarely covered by the decision of the I.T.A.T. Agra Bench in the case of Laxminarayan Ramaswaroop Shivhare reported in 123 TTJ 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there is any discrepancy in the stock. He further observed that the assessee s business operations are subject to regular inspection by the Excise Authorities that there was change in the excise law policy, which resulted into steep competition in the line of business which has already effected profit margin. After giving all these findings, he has deleted not only estimation of gross profit at higher rate, but also addition made on account of higher sales. Inspite of these findings the fact that the sales of the assessee was unverifiable remained in record. Only on the basis of sales figures the accuracy of profit rate declared by the assessee can be verified. In absence of verifiable sales figures, one have to go on estimation keeping ..... X X X X Extracts X X X X X X X X Extracts X X X X
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