TMI Blog2020 (3) TMI 1014X X X X Extracts X X X X X X X X Extracts X X X X ..... al value of items consumed and the value of closing stock. However, going by the past results and considering the totality of the facts of the case, we are of the considered opinion that adoption of 4% GP in the instant case will meet the ends of justice. We, therefore, direct the AO to adopt the GP rate of 4% and recompute the disallowance. Addition on account of disallowance of interest - Held that:- neither any specific ground has been taken before the Tribunal nor anything was argued by the assessee on this issue although the assessee in the general grounds of appeal has challenged the entire addition made by the AO. We, therefore, refrain from adjudicating the issue of disallowance of interest made by the AO in the original order. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,945/- 4. He further noted that in column No.28(b) the auditor has written not applicable. The AO, therefore, asked the assessee to explain as to why there is no manufacturing account since there is no manufacturing account in the books of account. The ld. AR of the assessee who appeared along with the partners confessed that it is not possible to provide manufacturing account as it cannot be made. The AO noted that the assessee makes a mixture of hing, gum, starch and oil to make adulterated hing which is sold in the market. The proportion of four items in the mixture is not fixed or specified. The proportion of these items to create this mixture depends on how much money is being paid by the customer. He, therefore, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter to the Hon ble High Court and the Hon ble High Court, vide ITA No.743/2014, order dated 9th March, 2015, restored the issue to the file of the CIT(A) by observing as under:- 8. This Court has carefully considered the submissions both before the CIT(Appeals) as well as the ITAT. The assessee categorically appears to have submitted that a quantitative tally of all the raw materials consumed in the making/preparation of the final marketable product was being maintained. Even though CIT(Appeals) noticed this contention as a matter of fact, the said authority did not render any finding. The ITAT instead went by the findings of the lower authority and merely based its conclusion on the interpretation of Section 145(2) of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained, the facts prove otherwise. Right from the first round of litigation the stand of the appellant has remained ambiguous. The appellant has been claiming that it is maintaining the qualitative and quantitative stock but the same was not found to be true by even Hon. ITAT. The appellant, again before me, has submitted the copies of ledger account of purchase of hing, gum, starch and oil. It records only the purchases in the respective account. However, what quantity was used to make which quality of hing, cannot be ascertained from this record. As Hon. ITAT, in its order, in miscellaneous application No.63/Del/2014 dated 25/09/2014 had observed that maintaining quantitative details of manufacturing account and maintaining quantitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following grounds:- 1. The learned CIT(A) has erred on facts as well as in law in sustaining the addition which is unjustified, unlawful and is based merely on surmises as is clear from his wrong observations made in page - 7 of his order in face of quantitative tally. 2. The learned CIT(A) is wrong in not referring to judgments of Hon ble Delhi High Court and the learned Tribunals and not deliberating even though these judgments are binding on him. 3. Addition is arbitrary in face of no defect in books having been found specially in face of results having been accepted upto Hon ble Delhi High Court in Appellant s case as well as Appellant s sister concern for last more than 30 years. 4. The CIT(A) has proceeded on surmis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore him. The detailed reasoning for which the ld. CIT(A) rejected the book results has already been reproduced in the preceding paragraph. It is the submission of the ld. Counsel for the assessee that the accounts are audited and no defects were pointed out by the auditors; that due to dispute in the family, the turnover has come down and the GP has also fallen; and in subsequent years the business has been closed and, therefore, adoption of such high rate of GP is uncalled for and the addition sustained by the CIT(A) should be deleted. We do not find force in the argument of the ld. Counsel for the assessee, especially in absence of non-production of manufacturing account and non-furnishing of details to arrive at the actual value of ite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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