9911796707
TMI Blog2007 (11) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... of books of account during the year under consideration and thereby applying higher GP rate of 11.51 per cent. which was earned by the assessee on low sales of Rs. 1.24 crores in the preceding year. The other reason stated by the AO of making trading addition was that in asst. yr. 2001-02, GP rate declared by the assessee at 9.64 per cent was not accepted and trading addition so made by rejecting the books of account was confirmed by the learned CIT(A), therefore, by following the order of the earlier year the AO has made addition by rejecting the GP rate of 9.94 per cent declared during the year under consideration. The ld AR placed on record the order of the Tribunal in assessee's own case in AY 2001-02 wherein addition made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent on sales of Rs. 1.24 crores. He further stated that the assessee did not maintain quantitative stock of the goods, therefore, gross profit of each and every item of sales cannot be correctly verified. Accordingly he rejected the book results and applied GP rate of 11.51 per cent and made trading addition of Rs. 2,41,955. The action of the AO was confirmed by the learned CIT(A). 4. We have considered the rival submissions and gone through the orders of the lower authorities and found from record that the assessee's books of account were subject to tax audit. Along with the return of income the assessee has filed audited P L a/c and balance sheet along with Annexures. During the course of scrutiny assessment the assessee produced books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deduced therefrom. As the onus to make out a case for rejection of books of account is on the Revenue, the AO is required to indicate specific defects in the books of account, which clinches the profit shown by the assessee or its state of affairs. 5. After production of books of account and submission of explanation by the assessee, if any asked for, with respect to the contents of the return and books of account, the Revenue may accept the same or after pointing out the specific defect may reject the books of account and proceed to determine the assessee's income as per the provisions of s. 145. Income-tax provisions nowhere either authorize the AO or cast an obligation on the assessee to prove the negative result, i.e., to prove as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employed? (iii) Whether the accounts are correctly maintained? (iv) Whether the accounts maintained are complete in the sense that there is no significant omission therein? If the answers to above four questions are in the affirmative, assessee's profits are to be computed on the basis of his accounts. In such cases, provisions of s. 145(3) cannot be invoked. On the perusal of the materials placed on record, in the instant case we found that answer to all the above four questions were affirmative. 7. Unless the AO is able to point out certain transactions which have been left to be entered in the books of account or that the assessee has sold some of the items at a price higher than what is disclosed in the books of account or if pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent was not accepted and trading addition so made by rejecting the books of account was confirmed by the learned CIT(A), therefore, by following the order of the earlier year the AO has made addition by rejecting the GP rate of 9.94 per cent declared during the year under consideration. The learned Authorised Representative placed on record the order of the Tribunal in assessee's own case in asst. yr. 2001-02 wherein addition made by the AO by applying GP rate of 10.14 per cent was deleted by the Tribunal and the GP rate of 9.64 per cent declared by the assessee was found to be reasonable and correct. As the facts and circumstances during the year under consideration are same, the issue is squarely covered by the order of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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