TMI Blog2021 (8) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... and 17.04% in A.Y 2012-13 and these past years results have apparently not attained finality as the matters are pending before the AO in the set-aside proceedings before the AO for A.Y 2010-11 and before the ld. CIT(A) in other years. Nothing has been brought on record in terms of finality of past year results. Therefore where the past years results have not attained finality and even third party comparable data is not on record, we are constrained to remand to the file of the AO for the limited purposes of determining the past years gross profit rate as have attained finality and apply the average of such gross profit rate which have attained finality to the year under consideration. In the result, the ground is allowed for statistical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of carpets. Cotton durries, Handicraft items, Readymade Garments, Woodwares and painting, etc. The assessee firm filed its return of income u/s. 139(1) and filed the audited financial statements and audit report u/s. 44AB. There was no qualification in the Audit Report. During the year assessee firm declared G.P. of ₹ 1,18,97,200/- on sales of ₹ 5,04,70,716/- giving a G.P rate of 23.60% against G.P. rate of 17.04% on the total sales of 4,77,78,214/- in the immediately preceding year. The AO by referring to 4 parties from whom purchases of ₹ 1,63,24,540/- was made held that these purchases are unverifiable. The AO, therefore, invoked the provision of Sec. 145(3) and disallowed 25% of these purchases resulting with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, production and manufacturing record were maintained and were produced before the AO. Total turnover of the assessee was ₹ 3,73,81,375 and out of this turnover, purchases to the tune of ₹ 15,83,000 remained unverified because of the reason that summons issued under s. 131 to these parties were either returned unserved or no compliance was made by the respective party. Therefore, AO drew an adverse inference against the assessee and rejected the books of account. In our considered view only on account of non-verifying of few purchases the rejection of books of account was not justified as there was no other defect found by the AO in maintaining books of account. It is also not the case of the Department that there is any materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 133(6) were issued to 4 parties from whom purchases of ₹ 1,63,24,545/- was made. However, the same returned unserved with the remark Not Known' or 'Left'. In respect of 2 parties, the investigation wing informed that these sellers are not genuine. The assessee has also not produced these suppliers to prove the genuineness of purchases. Therefore, the purchases cannot be said to be verifiable form books of accounts. Accordingly, the Assessing Officer rightly applied provision of section 145(3) of the I.T. Act, 1961. 2.3.1 In the year, assessee's GP is 23.60% on turnover of ₹ 5,04,29,116/- against GP rate of 23.83% on turnover of ₹ 2,52,34,453/- last year. As seen above, after application of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erusal of assessee's submission before the ld. CIT(A), we note that the assessee has disclosed a gross profit of 27.05% in A.Y 10-11, 26.16% in A.Y 2011-12 and 17.04% in A.Y 2012-13 and these past years results have apparently not attained finality as the matters are pending before the AO in the set-aside proceedings before the AO for A.Y 2010-11 and before the ld. CIT(A) in other years. Nothing has been brought on record in terms of finality of past year results. Therefore, in such peculiar facts and circumstances of the case where the past years results have not attained finality and even third party comparable data is not on record, we are constrained to remand to the file of the AO for the limited purposes of determining the past ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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