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TMI Blog2022 (12) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... for hearing before us pursuant to the order dated 16/02/2018, passed by the Co-ordinate Bench of the Tribunal in Marshall Multitrade Pvt. Ltd. vs ITO, M.A. no. 16/Mum./2017 (in ITA no. 1914/Mum./2008, for the assessment year 2004-05), whereby, the earlier order dated 04/05/2016, passed under section 254(1) of the Act was recalled and appeal was directed to be re-fixed for hearing. 3. In this appeal, the assessee has raised the following grounds: "1] The learned CIT(A) has erred in confirming the order passed by AO as 144 r.w.s.145(3). Reasons assigned by her for doing the same are wrong and insufficient. 2] On the facts and the circumstances of the case especially when nu inaccuracies having being pointed out in the body of the AO and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of Rs.67,946. During the course of assessment proceedings, the assessee was asked to furnish quantity and value-wise detail of opening stock/and closing stock. The assessee was also asked to furnish item-wise, month-wise, party wise bifurcations of the transaction along with bill No. for the quantity of sales and purchases made during the year and also proof of payment of excise duty made during the year, since in the Form 3CD the auditor has mentioned that the assessee is doing trading activity only, though the profit and loss account is showing the adjustment of the excise duty from the sale receipts. The assessee was also asked to produce books of accounts along with supporting bills and vouchers. In reply, the assessee submitted cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty, clearing and forwarding charges, port expenses, survey charges, cargo handling charges etc. Since the assessee does not have any infrastructure facility at the port of its own like storage tanks etc., it has to hire tanks from others for which it has to pay storage charges and that processing charges are paid to the refining units who process the crude oil and convert the same into consumable refined oil. The assessee also submitted that the observation of the AO that the assessee has not complied with the notice issued under section 142(1) of the Act is factually incorrect and all the details as sought were submitted by the assessee. The learned CIT(A) vide impugned order upheld the action of the AO in rejecting the books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntaining its accounts on mercantile system of accounting and therefore even when the payments are not made the appellant company could very well claimed such expenses which were incurred during the year under consideration whether the payment was made or not and therefore there was no need for the appellant to withdraw such a huge sum during the month of March and therefore it is clear that the appellant's accounts do not manifestly reveal the correct state of affairs. It is also pertinent to note that the appellant had claimed excise dirty paid as deduction where as stock in trade was not valued as required u/s 145A of the Income Tax Act. Since the appellant had paid excise duty and claimed as deduction the stock was necessarily requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to indicate that they are not reliable, yet it is not possible to lay down the exact circumstances in which these may be rejected as incorrect or unreliable. It is basically a question of fact to be decided on the facts and circumstances of each case. Similarly, a low gross profit rate may not per se lead to an inference that accounts are false but coupled with other relevant circumstances, it does afford a sufficient ground for rejection of the accounts and estimation of profits. In the instant case, the addition made by the Assessing Officer has been restored by the Tribunal not merely on account of low gross profit rate, but because of the cumulative effect of non-maintenance of the stock register and manufacturing account and underval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities found various discrepancies in the books of account maintained by the assessee and therefore rejected the same. It is an admitted fact that no stock register has been maintained by the assessee. Even as regards the payment of excise duty, the auditor has mentioned that the assessee is doing the trading activity, however, as per the profit and loss account assessee has adjusted the excise duty from the sales receipts. Further, the assessee has not valued the stock in trade as required under section 145A of the Act. During the hearing, reliance has been placed upon the statement pertaining to the net profit earned by companies in similar line of business, forming part of the paper book on page 49. However, apart from the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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