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TMI Blog2015 (5) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... it is noticed that the net profit rate in the immediate preceding assessment year, i.e., the assessment year 2008-09 was 5.02 per cent. 3. During the course of the assessment proceedings, the respondent-assessee was directed to provide material to justify the expenses claimed in the profit and loss account vis-a-vis receipts and a number of queries were raised. The assessee appears to have replied to the various queries raised by the Assessing Officer and it was admitted that the nature of work of the assessee is fully unorganised and that the work is carried out at various sites, where he could not maintain a proper system of accounting. It was also admitted by the assessee that the accounting work was conducted by the labour supervisor, who was also promoted from amongst labourers and did not have a knowledge of accounting and was unable to maintain co- ordination between assessee and suppliers and those sites. It was further submitted that the turnover and the net profit rate is better vis-a-vis the last five preceding years and, therefore, the book results should be accepted. 4. However, the Assessing Officer was dissatisfied with the explanation offered by the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n but still sustained an ad hoc addition of Rs. 5 lakhs as against Rs. 10 lakhs made by the Commissioner of Income- tax (Appeals). It is the deletion of an addition of about Rs. 1.12 crores, which has been assailed before us by the Revenue. 7. Mr. Praveen Verma, Assistant Commissioner of Income-tax, appearing on behalf of the Revenue, submitted that in the instant case several queries were raised and the assessee was unable to produce the vouchers and/or relevant information to substantiate the claim made in the profit and loss account. He contended that though the results shown may be technically said to be better in comparison to the past years but when the very vouchers have not been produced, therefore, mere acceptance in the past years cannot be a ground not to make addition in the subsequent years like the present one, where the assessee failed to substantiate the expenses claimed. He further submitted that if the said analogy is accepted then in all such cases, where there is slight rise in the very trading result or results are almost similar vis-a-vis in the past year then the addition can never be made. He contended that the order of the Assessing officer was well reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of 5 per cent. Compared with the said fact, in the present assessment year though the contract receipts have sharply increased from Rs. 10.60 crores to Rs. 12.32 crores in the immediate past assessment year at the same time the net profit has increased from 5.02 per cent. to 5.38 per cent. or now as per the order of the Tribunal it can be said to be raised at 5.78 per cent. with the addition of Rs. 5 lakhs sustained. 11. Though the argument of the learned officer of the Revenue can be said to be proper and justified that in a case where the assessee manipulates the accounts by keeping the profit margins commensurate with the past assessment years or slightly increases and that itself by a large cannot be a basis for acceptance of the results. But, in the face of the said facts, if it is for the Assessing Officer to bring on record some concrete material/evidence to make a proper addition. We have already noticed hereinabove that the Assessing Officer has merely disallowed 20 per cent. or 10 per cent., as the case may be, out of the various expenses, which, in our view, is not proper and he had to bring on record justifiable basis for making of an addition and bring on reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance to the Tribunal is good or bad, or whether it was rightly accepted, or not. It is only when the factual finding recorded had been entirely de hors the sub ject, or when it had been based on no reasoning, or when it had been based on absurd reasoning to the extent that no prudent man of aver age judicial capacity could have ever reached to such conclusion, or when it had been found against any provision of law, then a case for formulation of any substantial question of law on such finding can be said to arise. Such is not the case here on facts." 16. This court in the case of Pansari Gems International v. CIT reported in [2013] 33 Taxmann.com 667 (Raj) has held as under : "The total turnover during the year under reference is Rs. 8.86 crores. The Income-tax Appellate Tribunal has held that gross profit rate does not depend on the basis of specification of item, but it depends upon the quality, shine, etc. The assessee has earned gross profit varied from 6.32 per cent. to 26.45 per cent., but from the chart filed by the assessee, it cannot be concluded that gross profit rate declared by the assessee was correct. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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