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TMI Blog2004 (12) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... or the year under consideration in comparison to GP rate of earlier year at 9.76 per cent. 4. The AO stated that the assessee had maintained neither stock register nor quantitative tally of the items having been traded by the assessee. According to him the business of the assessee was growing, therefore, the GP should also be up. He found GP rate of 10.5 per cent to be fair and reasonable. Accordingly, the GP rate of 10.5 per cent was applied and trading addition of Rs. 53,514 was made. 5. The assessee carried the matter to the CIT(A) and stated that the AO had compared the GP rate of Balotra although there was change in the quality of the cloth traded by the assessee. It was also stated that the purchases and sales were fully vouched and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee started business at a new station, i.e., Surat, and the AO compared the OP rate achieved by the assessee at Balotra with that of Surat, however, ignored other contention of the assessee that new qualities of cloth were introduced while conducting the business at Surat. It seems that the addition had been made by the AO on the basis of presumption only which is not tenable in the eyes of law. In view of that, the learned CIT(A) was justified in deleting the addition. I, therefore, decline to interfere with the findings of the learned CIT(A) on this issue. 9. The next issue relates to deletion of addition of Rs. 50,000 made by the AO on account of various expenses. The AO made this addition by stating that the assessee had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had incurred expenses outside the books of account. In view of the above, I do not see any merit in this ground of Departmental appeal. 12. The next issue relates to the deletion of addition of Rs. 2,87,000 made by the AO on account of unexplained deposits in the capital account. 13. The AO made this addition by observing that the assessee introduced a sum of Rs. 2,87,000 in his capital account and had not given source for the same and mere producing of books of account did not absolve the assessee from the responsibilities of proving the entries in the books. The AO had not found tenable this explanation of the assessee that cash was appearing in the books of account at the closure of the year at Balotra, from where DD was purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lotra and out of accumulated cash, the assessee had sent the DDs to Surat which was shown in the capital account. From the above facts, it would be clear that the cash was brought by the assessee from the business conducted at Balotra when he started his business at Surat. Therefore, the learned CIT(A) was justified in deleting the addition made by the AO. 17. The last issue relates to the deletion of addition of Rs. 65,000 made by the AO on account of unexplained, investment in the house property. 18. For making this addition, the AO stated that the assessee bad made, certain investment in the house property and for that purpose had taken permission from the municipality; according to him such permission was only required for new or fres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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