9911796707
TMI Blog2010 (4) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 143(2) of Income Tax Act, 1961, (hereinafter referred to as the Act) was issued to the assessee. The assessee firm is engaged in the business of manufacturing and export of readymade garments and had declared gross profit @ 12.08% during the A.Y.2004-2005 as against gross profit of 12.37% declared by it for the A.Y. 2003-2004 and gross profit of 17.58% declared for the A.Y.2002-2003. The assessee claimed that the fall in gross profit ratio was due to reduction in margin, in order to increase sales. The assessee was asked to produce Books of Account and relevant registers. The Books of Account as well as certain vouchers were produced, but, the stock register was not produced, claiming that no such register was being maintained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he principle of continuity and consistency had been ignored. Relying upon the decision of Punjab & Haryana High Court in CIT Vs. Om Overseas: (2008) 173 Taxman 185 (P&H) and CIT Vs. Ludhiana Steel Roll Mills: (2007) 295 ITR 111 (P&H), it was held that estimation of gross profit on the basis of gross profit ratio declared by the assessee two years ago, was not justified. Accordingly, the addition made by the Assessing Officer was deleted. 4. While dismissing the appeal filed by the Revenue against the order of CIT(A), the Tribunal noted that the Assessing Officer had not found any defect in the books of accounts maintained by the assessee. The Tribunal was of the view that maintenance of Stock Register, which shows consumption of raw materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Appeals) as well as by the Income Tax Appellate Tribunal, the Assessing Officer had not pointed out any defect in the Accounts Books maintained by the assessee, which, admittedly, were produced before the Assessing Officer for his consideration. This is also not the finding of the Assessing Officer that the account of the assessee was not complete. No provision either in the Act or in the rules requiring an assessee carrying business of this nature, to maintain a Stock Register, as a part of its accounts has been brought to our notice. As regards non-production of Stock Register, the assessee has given an explanation which has been accepted not only by the Commissioner of Income Tax(Appeals) but also by the Tribunal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umber of pieces declared in the account books produced before him. 8. Another important aspect of this case is that, admittedly, the gross profit percentage declared by the assessee in the assessment year 2003-2004 which was the immediate preceding year, was more or less the same as was declared in the assessment year 2004-2005, to which this appeal pertains. However, the Assessing Officer, instead of applying the gross profit ratio declared in the immediate preceding year, applied the gross profit ratio declared in the assessment year 2002-2003, thereby failing to maintain the accepted principle of continuity and consistency. No ground at all has been given by the Assessing Officer for deviating from this accepted principle of assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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