9911796707
TMI Blog2011 (2) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal on the analysis of evidence produced. No question of law arises, this appeal is accordingly dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO rejected the books of account. These reasons given by him can be summarized as under: (1) Though in the Audit Report with the return for the assessment year 1998-99, it was mentioned that the assessee maintained cash book, bank book, ledger and sales/purchase registers, but for the assessment year in question, the Audit Report has mentioned only cash book and ledgers. Thus, the assessee is not maintaining any stock register and sale/purchase register, which it was doing in the preceding year. (2) The Auditor had qualified his report by saying that it was not possible to give quantitative details of items. This implies that no closing stock inventory is prepared at the end of the financial year. In this way, the assessee had complete freedom to show the closing stock and G.P. rate it wanted to show in further year. (3) The assessee was asked to file quantitative details of opening stock, purchases, sales and closing stock for Financial Year 1998-99. In response, the assessee filed inventories of opening and closing stock only which after verification, was found to be incorrect from which the AO deduced that the assessee had not maintained the accounts in the manner that re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hown to be the same. No satisfactory evidence in support of this valuation could be produced, as already discussed. (c) In the inventory of opening stock and closing stock for the year, a flat rate has been applied to each item without taking into account size, brand, style, etc. In the inventory prepared at the time of survey, it has been found that the rate of any items varies according to brand, size, quality etc. It is, therefore, obvious that the inventory of opening and closing stock filed by the assessee during the course of assessment proceedings, is cooked up and does not give a true picture of the actual stock available either at the beginning or end of the financial year. (d) The assessee contended that it had returned some of the purchases made by it from various parties. Three such purchases returned were taken up on test check basis and the assessee was asked to relate them with the corresponding purchase bills. The assessee failed to do so in the case of Woman‟s World. (e) The assessee failed to correlate any sale with the corresponding purchase of an item. (f) The assessee was asked how it keeps track of all the items in the absence of stock register or st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view the gross profit as noted from the three trading accounts for the financial year 98-99 and deposition of Sh. R.D. Gupta, I am of the opinion that it would be reasonable and fair to apply a G.P. Rate of 21% on sales of ₹ 6 crores which would meet the ends of justice. This would result in gross profit of ₹ 1,26,00,000/- against ₹ 79,04,653/- disclosed by the assessee (addition of ₹ 46,95,347/-)." 5. The first appeal preferred by the assessee against the aforesaid order of the AO was dismissed by the CIT (A). While accepting the reasoning given by the AO, the CIT (A) additionally stated that though the assessee was objecting to addition of ₹ 46,95,347. At the time of survey itself, discrepancies to the tune of ₹ 35.28 lacs was found which was unaccounted and was offered for taxation. So much unaccounted income within 9 months 21 days of the start of the business would show that it was at the rate of ₹ 3,61,850 per month. In this manner, unaccounted money for 12 months works out ₹ 43,42,200 and looking from this angle, the AO's estimate of ₹ 46,95,347 could not be said to be devoid of merit. 6. The Income Tax Appellate Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
