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TMI Blog2011 (2) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus cross objection filed by assessee is allowed. - ITA No. 3665/Del/2011 - - - Dated:- 12-2-2011 - SHRI G.E. VEERABHADRAPPA, SHRI A.D. JAIN, JJ. Appearances by: Appellant by : Sh. B.R.R. Kumar, DR Respondent by : Sh. K.C. Singhal, Advocate ORDER PER A.D. JAIN, J.M. This is Department s appeal and Assessee s Cross Objection against the order dated 18.11.2010 passed by the ld. CIT(A)-XXIII, New Delhi. The department, in its appeal, has contended that the ld. CIT(A) has erred in deleting the addition of Rs. 47,95,526/- made by the AO on account of bogus purchases and in directing the AO to apply a Gross Profit (GP) rate of 8.5% of the turnover so as to confirm the addition to the extent of Rs. 22,81,572/- only on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2007 were reflected in the assessee s closing stock and the assessee had not given any reason or explanation for not selling this stock; that the copies of account and stock register submitted by the assessee, being computer generated sheets, were merely self-serving evidence and were not worthy of reliance; and that the contention of the assessee that the purchases were reflected in the stock register, which established the genuineness of the transaction, was not acceptable, since merely quantitative details entered in the stock register could not prove the genuineness of the purchases. In this manner, the AO made an addition of Rs. 47,95,526/-. 4. By virtue of the impugned order, the ld. CIT(A) confirmed the addition made by the AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the address to be a non-existent address. 6. The ld. Counsel for the assessee, on the other hand, has contended that all purchases are duly recorded in the books and stock register and they are also duly recorded as sales/closing stock; that this has not been disputed by the AO; that the purchases disputed by the AO were not sold and were shown in the closing stock, which was also not disputed by the AO; that the objection of the AO was that the assessee could not explain as to why the purchases could not be sold; that the copy of stock register was furnished before the AO and the same has not been questioned; that the AO only disputed that the copy of the stock register was a computerized copy and it could not be relied on, as it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock. This has nowhere been denied by the Assessing Officer. He rejected the stock register merely because the copy thereof, as produced by the assessee before him, was a computer printout copy. The ld. CIT(A) has correctly not gone by this action of the AO. The ld. CIT(A) rejected the assessee s books of account and directed application of GP rate of 8.5%. The question is as to whether the GP rate applied by the ld. CIT(A) is correct. 8. For applying a GP rate of 8.5% to the turnover, the ld. CIT(A) has not given any reason whatsoever. It is well settled that estimation cannot be made in the air. It has to be based on some material. Now, obviously, when no comparable case or instance has been cited by the ld. CIT(A) to arrive at an esti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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