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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 ..... ected under the provisions of sec. 145(3) of the I.T. Act, 1961 on the grounds that the trading results declared by the appellant were not verifiable in the absence of an item wise stock register and that the books of accounts were not in accordance with the provisions of sec. 44AA of the Income Tax Act, 1961. 1.2 That on the facts and in the circumstances of the case, both CIT(A) and ITO erred in rejecting the book results and making an addition of Rs. 5740570/- since not even an iota of inaccuracy was found in the books of accounts. Indeed even the turnover disclosed by the appellant was accepted by the ITO and CIT(A). 2.1 That on the facts and in the circumstances of the case, the lower authorities erred in holding that the cases of Jai Prakash M/s Narwana Timber Stores, Karnal for A.Y. 2004-05 & 2005-06, Neeraj Jain Proprietor Jagdamba Timber Store Karnal for A.Y. 2006-07 were comparable with the case of the appellant. 2.2 That without prejudice to Ground of Appeal No. 2.1 above, the ITO erred in drawing the inference from the comparable case cited by him that a gross profit rate of 4.9% was applicable in the case of the appellant. CIT(A) also erred in drawing the inference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils in the Stock Register the action was assailed as bad in law. Reliance was placed upon the following judgments. 1) CIT Vs.Gotan Lime Khanij Udhyog, 256 ITR 243 (Rajasthan); 2) Madnani Construction Corporation P. Ltd. vs. CIT, 296 ITR 45 (Gauhati); 3) Pyarelal Mittal vs. ACIT, 291 ITR 214(Gauhati); 4) CIT vs. R.K. Rice Mills, 319 ITR 173(P&H); 5) CIT vs. Om Overseas, 315 ITR 185(P&H); 6) CIT vs. Paradise Holidays, 325 ITR 13(Delhi); 7) CIT vs. Jas Jack Elegance Exports, 324 ITR 95(Delhi); 8) CIT vs. Mascot (India) tools and Forgins P. Ltd., 320 ITR 116(Allahabad); 9) Pankaj Diamond vs. ACIT, 5 ITR(Trib.) 469(Ahmedabad); 4.1 It was also his stand that the AO has made a comparison as per page 10 of the impugned order with three different parties. For Jai Parkash M/s Narwana Timber Store, Karnal, he has taken the figures for 2 assessment years wherein qua A.Y. 2004-05 he has based his conclusion on the fact that GP rate was 6% which is factually wrong as per the assessment order now in the possession of the assessee which would show that the gross profit disclosed was 4.6% and thus, the averaging done by the AO of 4.90% is itself wrong as when the correct figures ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted. As per the assessee's claim the comparison is made with uncomparables whose facts have also been wrongly appreciated. The assesee has also sought to buttress its claim relying upon comparable cases; It is seen that these would constitute fresh evidences as such we do not admit the same. However, the fact remains that the assesee has demonstrated that material used has not been confronted to the assesee. We have taken note of the departmental stand that res-judicata does not apply in the income tax proceedings however, there is also an equally strong legal principle to be considered namely consistency. Which principle shall apply in a set of facts has to be considered as per settled legal precedents on the facts of each and every case. Generally when comparisons are resorted to then it is universally a settled legal principle that ones own past history is the best evidence and basis for making comparisons. No doubt res-judicata does not apply to the Income Tax proceedings. However, the past history of the assessee is an important indicator which is to be taken into consideration unless there are reasons factual or legal which lead to the conclusion the past history has to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A perusal of the record shows that 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. Except a few local purchases most of the purchases were from Singapore. The Assessing Officer observed as per the purchase bills that different varieties were imported the description and quality had been mentioned there. However, the sale bills did not reflect the same description and quality. Hence, he was of the view that the Sale Bills could not be co-related to the purchase bills the trading results as such were considered to be not verifiable. Further since stock register did not contain quality wise details of timber the valuation of opening stock and closing stock was considered to be unverifiable. The AO at page 8 accordingly, making comparison with same local concerns as in the earlier appeal estimated GP @ 4.9%. In appeal the same was reduced to 4%. Aggrieved by this both the assessee and the department are in appeal. It is seen that the assessee in its reply at page 9 para 2 contended before the AO that after purchasing the round timber logs from the for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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