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TMI Blog2015 (8) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... le business as adopted by Assessing Officer. 3. The appellant prays that the order of the Id. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 4. The appellant craves leave to amend or to alter any ground or add a new ground, which may be necessary." ITA No.2944/Mum/2013: Grounds of appeal filed by the assessee read as under: "1. The Ld. CIT(A) erred in confirming the rejection of books of account based on conjunctures and surmises, by relying on the observations of the A. O. Which are not relevant to the issues under consideration, and without pointing out any specific defects in the books of accounts. 2. The Ld. CIT(A) erred in confirming the estimation of the G. P. at 3 % i. E. Rs. 51,32,520/ -from Iron & Steel business without appreciating the fact that all the parties had directly responded to the notices issued to them, and without appreciating the fact that any trader hardly earns G. P. from the range of 1 % to 2 % only. 3. The Ld. CIT (A) erred in confirming the estimation of G. P. at 15.20% i. E. Rs. 72, 39,554/- from Textile business without appreciating the fact that some parties had directly responded to the notices issued a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchases from other parties and found that the purchases in respect of 13 parties as per the assessment order were not verifiable. Accordingly, he rejected the books of account and adopted the G. P. rate @20% in respect of textile business on total turnover of Rs. 4,76,28,648/-, and G. P. rate of 10% in respect of Iron and Steel on turnover of Rs. 17,10,84,032/ - and worked out the GP at Rs. 2,66,34,132/ - and made the addition accordingly. 2.1. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority(FAA), who reduced the GP to 15.20 % in case of textile business and @ 3% for iron and steel business. 2.2. It was brought to our notice that identical issue has been adjudicated by the Tribunal, while deciding the appeal for the AY.2007-08(ITA/6931/Mum/2011-dtd.03.04.2013). We find that the Tribunal has dealt and decided the issue of GP rate in the earlier AY. In following manner: "8. We have considered the rival submissions and also perused the relevant material available on record. It is observed that the assessee is in the business of dealing in iron and steel products and textile products and on the total turnover of the said bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. for the specific discrepancies pointed out therein which the assessee failed to explain. Moreover, both the iron and steel business and textile business were carried on by the assessee under the name and style of his proprietary concern M/s Mannat Enterprises and the copy of balance sheet and P&L account of the said proprietary concern placed at page 1 to 25 of the assessee's paper book shows that only one set of books of account was maintained by the assessee for both iron and steel business and textile business. It is therefore not possible to accept the books of account of the assessee in respect of iron and steel business and reject the same in respect of textile business as sought to be contended by the ld. Counsel for the assessee. Even otherwise, some of the material defects pointed out by the A. O. as well as adverse findings of the survey were related to the overall business activities of the assessee which fully justified the rejection of combined books of account maintained by the assessee for iron and steel and textile business. 10. Having held that the rejection of the books of account of the assessee by the authorities below is fully justified in the facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be fair and reasonable to adopt the average GP rate to estimate the income from textile business which may be taken at round figure of 15%. 12. As regards the GP rate to be applied in respect of iron and steel trading business, the ld. Counsel for the assessee has relied on the decision of the coordinate Bench of the Tribunal in the case of Inel Trading Company (supra) submitting that the low GP rate of 1.82% was applied in that case in respect of iron and steel business. It is however observed that although a GP rate of 1.82% was mentioned in the said order in respect of business of trading in iron and steel business, the income of the assessee in that case was finally estimated by the Tribunal by applying certain net profit rate. Moreover, as already noted by us, the facts involved in the present case are peculiar inasmuch as the assessee was found to be indulged in a practice of routing the unaccounted money through illegal ways and channelizing them to be looked like a genuine transactions. It is observed that while applying GP rate of 10% in respect of business of dealing in iron and steel, the reliance was placed by the A. O. on the comparative GP rates shown in the ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, that the liability had not ceased. After considering the submissions of the assessee and the assessment order, the FAA held that the creditors were not tracable, that the AO had deputed one inspector to enquire about those parties and the parties were not available on the given addresses, that the creditors appeared to be non genuine, that the assessee had not produced the evidence that payments were made to the parties in subsequent years. He referred to the remand report filed by the AO in that regard and held that the AO was justified in making additions. 4.2. Before us, the Authorised Representative(AR)contended that evidence of payment to various creditors through banking channels was produced before the FAA, that no inspector was deputed by the AO, that the remand report is silent about the visit by the inspector, that the AO had not also not doubted the payment made to the creditors in the subsequent years. He relied upon the judgment of Bhogilal Ramjibhai Atara of Hon'ble Gujarat High Court.(Tax Appeal no.588 of 2013 dated 04.02.2013). He referred to the page no.33-44,117 and 119-120 of the paper book. Departmental Representative(DR)supported the order of the FAA. 4.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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