9911796707
TMI Blog1987 (11) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... led the return on 29th June, 1982 showing an income of Rs. 27,422 on total sale of Rs. 10,10,464 and disclosed gross profit rate at 33 per cent. During the course of assessment ITO found that assessee has not maintained inventory of the closing stock and also did not maintain day to day quantitative and qualitative details. Thus he invoked the provisions of s. 145(2) and relied on the case of M/s Paradise Automobiles where the gorse profit was taken at 20 per cent and thus he estimated the gross profit at 17 per cent. He also enhanced the sales from Rs. 10,10,464 to Rs. 10,50,000. 2. Being aggrieved, assessee carried the matter before the CIT(A). CIT(A) has agreed with the ITO that provisions of s. 145(2) are applicable. However, he did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given by the authorities below for invoking the provisions of s. 145(2) are audit report where it is said that assessee has not furnished quantitative figures of purchase, sales and stocks. It is obvious in the business dealing in spare parts that it is not possible to maintain quantitative and qualitative details by the sub dealer where he has to sell small items to different customers in a day. 4. On the other hand ld. Departmental Representative Shri A.S. Choudhary submitted that when assessee has not maintained details of day today sales and purchases, even in audit report this defect has been pointed out by the auditors, the provisions of s. 145(2) are applicable and when the gross profit in other cases are 20 per cent or more, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. We have perused those orders placed on the assessee s paper book from pp. 39 to 42. We agree with Shri N.M. Ranka that for gross profit the comparable case should be the case where the assessee is not only dealing in truck spare parts but should be dealer of a particular company. When M/s R.V.S. Auto Services and trucks manufactured by M/s Ashok Leyland and spare parts thereof are the comparable cases on the facts of this assessee s case and when the gross profit rate taken at 11 per cent and the assessee has shown g.p. rate of 12 per cent that appears to be a reasonable rate. The addition made therefore be deleted. 6. The next issue in the assessee's appeal for our consideration is whether CIT(A) erred in confirming the disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue to hear the assessee and decide the same on merits. In revenue's appeal the only issue for our consideration is whether the CIT(A) erred in reducing the trading additions to Rs. 41,017 from Rs. 47,739. Relevant facts are that by invoking the provisions of s. 145(2) the ITO has enhanced the sales from Rs. 10,10,464 to Rs. 10,50,000. As CIT(A) has rightly pointed out, no material was brought by the ITO to justify the enhancement of sales. Therefore, the same was deleted by the CIT(A). In appeal before us also nothing has been shown which supports regarding the enhancement of sales as has been done by the ITO. 9. After hearing the rival submissions and perusal of materials including the order of the authorities below, we do not find an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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