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TMI Blog2022 (7) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... andhidham in applying the provisions of Section l44 of the Act and rejecting books of accounts U/s.145(3) of the Act. [2] That the Ld. CIT(A)-3,Rajkot ought to have considered that on the facts of the case in aw, the appellant company having produced all details, informations and evidences in possession of the appellant company to substantiate the business transactions, there was no justification for the Ld. DCIT, Circle Gandhidham in rejecting the returned loss and books of accounts u/s. 145(3) of the Act and estimating net profit @7% of the turnover. [3] That the Ld. CIT(A)-3, Raikot failed to consider that the order passed by Ld DCIT, Circle Gandhidham was without reasonable opportunity being given to the appellant, by not giving c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the appellant company may please be deleted or reduced. (ii) That the interest charged U/s. 234B, U/s. 234D and interest recovered U/s. 244A of the Act may please be cancelled. (iii) That the penalty proceedings initiated, u/s. 271(1)(c) of the Act may please be cancelled. (iv) such other relief or deduction as the facts and circumstances of the case so requires be granted. [9] The appellant craves leave to add, alter, amend, modify the grounds of appeal on or before or at the time of hearing." 3. At the outset, the counsel for the assessee submitted that the issue has been decided against the assessee in assessee's own case passed by Rajkot ITAT in ITA number 240/Rjt/2016 and CO number 01/Rjt/2017 for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r outside concern at lower cost and thus could have avoided the heavy loss. I have specifically taken note of AO's observations regarding preparation of the invoice where the invoice against one party are running a continuous series dis-regarding intervening dates whose transaction have occurred with other parties. It is correct that many of observations of the AO are not serious enough on standalone basis to warrant book rejection but when the matter is seen on the whole it is apparent that appellant had not maintained its books including the invoices challan and other documents in proper manner. The delivery challan and lorry receipts should have been there either with the appellant or with the client e.ien if delivery is being made direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rept in estimation of income due to unreasonable adoption of GP ratio of 7% over the trading turnover of 704.61crores. In A.Y. 2010-11 have taken the NP profit rate of 0.5% over the turnover of Rs. 259.57 crroes. The appellant had returned NP @ 0.03% only in its return of for A.Y. 210-11 which was revised upward to 0.5% by me. Ld. AR has argued that he same NP rate should not be applied for the current AY because there e was major difference in the facts and circumstances between A.Y. 210-11 & present AY 2012-13. Such differences has been highlighted by the LD. AR in his submission already reproduced in para 4.3. There is enough force in the augment of the Ld. AR and the blind application of NP rate of 0.5% adopted for AY 210-11 will not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racts of the ITAT Ruling is reproduced below for ready reference: "11. The Revenue has challenged this basis of estimation of net profits by the ld. CIT(A). 12. We are not in agreement with the contention of the Ld. DR that the basis adopted by the A.O. was correct. Having rejected the books of accounts of the assessee, the very same set of books could not have been relied upon for revealing the true profitability of the assessee, even though in part, i.e. relating to the period excluding the last month of the year, since admittedly the books were rejected not only for the reason that the transactions in the end of the year were managed to book losses but also on account of booking expenses of loading and unloading throughout the year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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