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TMI Blog2014 (12) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... "Whether on facts and circumstances of the case, conclusion reached by the Tribunal is contrary to the facts and evidence, and whether the finding recorded is perverse or not ?" 3. The facts of the present case are that the return of income is fled on 13.8.1991 declaring a loss of Rs. 16,546/-. Copies of audited accounts, balance-sheet and tax audit report under sec. 44 AB have been filed. After considering the material on record, the AO has passed the assessment order. 4. Learned advocate Mr. Divatia appearing for the appellant has contended that while passing the assessment order, the AO has observed in para-3 as under: "3. Gross Profit: It is seen that the assessee had dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This indicates a gross loss of Rs. 132/- per cubic meter. It may be highlighted that the cost of timber is so increasing regularly that there cannot be any loss. In an imported timber the customers are ready to pay any higher price. The statement is doubtful. However, in a closing stock in column of the same item the assessee has shown value at Rs. 31,27,179/- for 595.294C.M. i.e. Rs. 5,253/- per C.M. At this rate, the sale should be of Rs. 2,31,76,236/-. If this is taken then the addition would be so much higher that also cannot be accepted as reasonable. Thus, it is clear that there is some mistake in this statement. However, from above, it is very clear that the imported timber is sold at a very high rate and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticable. This is also correct in respect of the monthwise purchase and sales in terms of quantity as pointed out by the department was concerned. Again he pointed out that statement of certain bills to bills, purchases and sales transaction running into about 8 such instances was handed over to the Assessing Officer. This statement indicates that the GP runs from as low as of 0.65% in respect of the sale made by the appellant to the Woodcrafts products Ltd., to as high as that of 11.50% in respect of the sale made to the Western India Ltd. From this statement, the learned CA Shri Patel maintained that it was not correct that uniformly the GP rate of 7.97% was being declared by the appellant in respect of all the sales of the entire period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closing stock was being valued by the appellant at cost. Now if this cost price (Rs. 5,253/- per CM) was multiplied with the total sales of imported timber of 4412 CM, then no doubt the figure of Rs. 2,31,76,236/- could have been arrived at by the Assessing Officer, but he emphatically maintained that this would represent the sales (and consequently gross profit also) which an assessee could have earned but in fact did not earn. If this approach of the Assessing Officer was thus not correct, then the GP addition made by the Assessing Officer was also, he submitted; logically not correct inasmuch as for making this GP addition the Assessing Officer was obviously guided by this approach. He lastly pointed out that the GP of 15% was not declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable as income accrued to him." This view is then reiterated in 91 ITR 9 (SC) in the Calcutta Discount Pvt. Ltd. Secondly, the G.P. of 15% for AY 1987-88 was for a year wherein there were erasers and overwriting which factors are totally absent in this year. Thirdly, the Assessing officer has stated several reasons in his favour like the cost of imported timber was increasing regularly for which the customers were ready to pay any high price, the statement of the appellant was doubtful, there was some mistake some wherein the appellant's statement, it was clear (to the Assessing Officer) that the imported timber was sold at a very high price form which the appellants earns a very handsome profit etc. But all these s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for making the addition of Rs. 8,41,296/- by rejecting the books of accounts u/s. 145, we are of the opinion that learned CIT(A) erred in deleting the addition. We, therefore, hereby set aside the order of the learned CIT(A) and hold that addition of Rs. 8,41,296/- on the facts and circumstances of the case is correctly made by the Assessing officer. This ground of appeal is accordingly allowed. 6. Learned advocate for the respondent has tried to support the order passed by the Tribunal and submitted that the view taken by the Tribunal is just and proper. 7. We have heard the learned advocates appearing for the parties and considered the submissions. While considering the observation of the CIT(A) in para-4 and 5, it appears that the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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