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TMI Blog2012 (2) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... in directing the AO to adopt the GP of preceding assessment year instead of average of last two assessment year." 3. The learned DR submitted that there was no justification for the CIT(A) to apply GP rate of the preceding assessment year 2000- 01 instead of the average of the last two assessment years, as applied by the AO. He submitted that the assessee has not maintained daily records of consumption of colours and chemicals and did not maintain stock register. There was high variation in the consumption of raw-material month-wise. In these facts, the AO has rejected the book results shown by the assessee and has estimated the income of the assessee by applying the average GP rate of the last two preceding years at 10.70%, which was quit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g period. There being no material to suggest that the GP rate applied by the CIT(A) was not reasonable or was without any basis, we uphold the order of the CIT(A) and the ground of the Revenue is dismissed. ITA No.274/Ahd/2009 (A.Y. 2003-2004) 5. The grounds of the appeal of the Revenue are as under: "1. The CIT(A) has erred in law and on facts of the case by deleting the 3% disallowance made by the AO on account of unverifiable purchases amounting to Rs.7,97,538/-. 2. The CIT(A) has erred in law and on facts in deleting the 3% disallowance made by the AO on account of unverifiable consumption of colour and chemicals amounting to Rs.14,51,596/-. 3. On the facts and in the circumstances of the case and in law, the CIT(A) has erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee, has been upheld by the CIT(A) and this issue is not in dispute before us. The GP rate of 10.65% shown in the immediately preceding assessment year was applied to the turnover of the assessee which could not be said to be unreasonable or without any basis. With regard to other issues of further addition on account of unverifiable purchases and unverifiable consumption of colour and chemicals, we find that once the account books of the assessee are rejected and average rate of GP is applied to the turnover of the assessee and trading addition is made, there is no justification for making any addition on the basis of same rejected account books on account of the defects in the account books viz. unverifiable purchases and unve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in deleting the disallowance u/s.43B of the Act as the amended provision has the effect from the subsequent year." 12. We have heard both the parties. We find that the disallowance of Rs.31,109/- was made on account of late payment of PF and ESI. The CIT(A) has held that if the payment is made before the due date of filing of return, the amount cannot be disallowed. The issue is covered in favour of the assessee by the decision of the ITAT, Ahmedabad Benches in the case of Sai Consulting Engineers P. Ltd., vide ITA No.2262/Ahd/2007 dated 10-08-2007 for A.Y.2004-2005 and accordingly, there is not merit in the ground no.4 of the Revenue, the same is accordingly rejected. 13. In the result, all three appeals of the Revenue are dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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