9911796707
TMI Blog1980 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... the defects found by him in the books of accounts maintained by the assessee as follows: "The accounts maintained in respect of foundry are unquantitative and the inventory of the closing stock is maintained on estimate basis. Hence the G.P. shown at 20 1/2 per cent is not accepted and the G.P. of the assessee is estimated applying provisions s. 145(1) i.e., at Rs. 6,674 in foundry business to cover up the defects." 3. Therefore, the ITO rejected the trading results of the assessee by applying the proviso to s. 145(1) in order to "cover up the defects". The matter was taken up in an appeal before the AAC who observed inter alia as follows and reduced the addition: "The assessee showed a G.P. of 22 per cent on a turnover of Rs. 45,528 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64 was sustained by the AAC. 6. It was argued before us by Shri V.H. Patil that the entire matter relating to the additions to the trading results had been the subject matter of appeal on the earlier occasion before the AAC and that therefore, the present subject matter of s. 154 had already been adjudicated upon by the AAC in the regular appellate proceedings on the earlier occasion. It was, therefore, pointed out that the ITO had no jurisdiction to resort to s. 154. He strongly urged that the ITO lost his jurisdiction to invoke s. 154, when he had made an addition in the original assessment order in order to cover up the defects in the books of account as seen by him. The mistake now sought to be rectified by the ITO was part and parcel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore the AAC's action, it was argued, was justified and proper. He relied on the Gujarat High Court decision in the case of Padmavati Jaykrishna (1976) 105 ITR 115 (Guj) to bring home his point that a mistake apparent from the record of the case may involve a genuine argument or a complexity and that the presence of complexity or then necessity for a genuine argument would not by itself out of the jurisdiction of the taxing authorities, to rectify the mistake. He then relied upon the Supreme Court decision in the case of Mahendra Mills Ltd. (1975) 99 ITR 135 (SC)and pointed out that the records of the earlier years formed part of the records of the case for the present year as well. 8. We have considered the rival contentions advanced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he figure of opening stock goes only to amend the gross profit which was already estimated by the ITO in the original assessment order by having recourse to the provisions of the proviso to s. 145(1). Therefore, the ITO, in our opinion, had no jurisdiction to amend the figure of opening stock under s. 154 after estimating the trading additions or after estimating gross profit by having recourse to the proviso to s. 145(1) in the manner prescribed above. The ITO should have requested the AAC to look into the matter. However, as far as the present appeal goes, the matter was entirely outside the jurisdiction of the ITO under s. 154 having regard to the subject matter of s. 154 as it was passed. It is, therefore, not really necessary to refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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