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TMI Blog2012 (12) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... hen ones own past. Thus, the assessee’s own case can be considered and if still need be felt judicially to make comparisons with comparables, then it can be done only after confronting their facts to the assessee. Rejection of books of accounts – Held that:- Contended that in the timber business it is not possible to maintain item wise details as after sawing in different sizes it is recognized as timber like wise as in the trade of marble purchased and sold it is described as marble the day to day stock register is maintained - failure on the part of the assessee in not maintaining stock register it was stated can be a ground for suspicion however, if explanation of the assessee that it is not practical or feasible in the line of business is to be considered - issue is restored back to the file of the AO - ITA Nos. 5717, 5662, 5714 & 5933/D/2010 - - - Dated:- 31-1-2012 - SMT. DIVA SINGH SHRI K.D. RANJAN, JJ. Appellant by : G.N. Gupta, CA Respondent by : S. Mohanty, DR ORDER PER BENCH: These are four appeals filed by the Revenue and two different above named assessee s against separate orders dated 27.09.2010 14.10.2010 of CIT(A) Karnal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. That the appellant craves liberty to add, amend or vary any Ground of Appeal. 2.1 The departmental grounds read as under: - 1. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in directing to work out profit by applying a G.P. rate of 4% as against 4.9% applied by the AO without appreciating that G.P. rate declared in the comparable cases of the line relied upon by the AO had shown better results and the account books maintained by the assessee suffered from defects so as to warrant invoking of sec. 145(3) of the I.T. Act. 2. That appellant craves leave to add or amend the grounds of appeal before the appeal is heard or disposed off. 3. The relevant facts are that the assessee in the year under consideration returned an income of Rs. 2,09,390/-. The AO observed that the assessee firm is engaged in trading of timber and except a few local purchases most of the purchases were from Singapore. The AO also observed that as per the purchase bills different varieties were imported the description and quality had been mentioned. However, the sale bills did not reflect the same description and quality. Hence, the Sale Bills could not be co-related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO were wholesalers or retailers as such assessee sought their particulars which were never confronted to the assessee. It was his argument that information used was never confronted to the assessee. The ld. AR on the other hand, sought to place reliance by way of supplementary paper book upon comparable cases so as to contend that the GP rate declared by the assessee should be accepted, Wherein copy of Assessment Order dated 24.12.2008 passed by ITO Ward-1, Karnal for A.Y. 2006-07 in the case of M/s Janta Timber Store; copy of Assessment Order dated 12.12.2008 passed by ITO Ward-1, Karnal for A.Y. 2006-07 in the case of M/s Swastik Timber Store copy of Assessment Order dated December, 2008 passed by ITO Ward-1, Karnal for A.Y. 2006-07 in the case of M/s Mittal Timber Store were enclosed. 4.3 It was also his stand that the sales of the assessee have been accepted as such the declared results should have been accepted. 5. The ld. DR on the other hand, relied upon the assessment order. 6. The parties before the Bench were required to address the past history of the assessee namely whether the books of accounts of the assessee have been rejected in the previous years; the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not known to the assesee cannot be upheld as merely confronting the names cannot be said to be affording a genuine and effective opportunity of being heard as relevant facts have not been disclosed. The AO must take into consideration the local practices and also refer to previous record of the assessee and consider comparables after confronting these facts of the assessee so as to arrive at a fair and proper estimate if best judgment has to be resorted to. The AO while making the best judgment is not entitled to ignore the assessee s own history as what better comparison then ones own past. Thus, the assessee s own case can be considered and if still need be felt judicially to make comparisons with comparables, then it can be done only after confronting their facts to the assessee. 7.1 Accordingly, on account of the reasons given hereinabove the issue is restored back with the direction that the AO shall decide the issue denovo taking the past history of the assessee and if it is so warranted that comparisons have to be resorted to then full facts of the comparable concerns shall be confronted to the assessee and the assessee accordingly should be given a reasonable hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible to maintain item wise details as after sawing in different sizes it is recognized as timber like wise as in the trade of marble purchased and sold it is described as marble the day to day stock register is maintained and since the assessee is dealing only in one single item as per para 8 page 11 of the assessment order it was contended that the quantity of all wood purchased and sold is shown in cubic meters. The comparison with the parties sought to be made by the AO was questioned and on the ground that the facts were not known whereas the assessee has dealt with High-Seas Sales as per page 12 para 12 it was questioned whether the comparable cases have any High-seas sales which were in lesser quantity or not. As such as per para 13 it was submitted that the assessee s own history would be more relevant. The failure on the part of the assessee in not maintaining stock register it was stated can be a ground for suspicion however, if explanation of the assessee that it is not practical or feasible in the line of business is to be considered. The reasons for accepting or rejection have to be given it has been stated therein that there must be something more than suspicion befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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