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TMI Blog2015 (10) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... had not rejected the books of account and hence the provisions of see. 145 cannot be applied does not merit acceptance for the clear reason that the observations of the Ld. CIT(A) as discussed above are crying hoarse that the books of account maintained by the assessee were not appropriate and provisions of sec. 145 are applicable. His further decision in deleting the specific disallowances of expenses and applying a particular G.P. rate clearly proves that in his opinion the books were not properly maintained and he rejected such books of account for making a trading addition. Admittedly the Revenue has not filed any second appeal against the finding given by the ld. CIT(A). This shows that the impugned order has been accepted by the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Revenue and Cross Objection by the Assessee emanate out of the order passed by the Ld. CIT(A), Jodhpur in Appeal No. 28/2006-07 dated 18.9.2006 pertaining to assessment year 2003-04. 2. The ground raised in the Revenue s appeal read as under:- Whether the CIT(A) was correct on facts and in law in deleting additions made on account of brick production expenses, clay excavation and carriage expenses and expenditure on water courses without appreciating the facts that assessee had altogether failed to produce the relevant support evidence to substantiate its claim of expenses which were entirely made in cash. 3. The brief facts of the case are that the assessment u/s. 143(3)/147 of the Income Tax Act was completed by the ACIT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6A filed Cross objection against the order of the CIT(A), Jodhpur before the ITAT, Jodhpur. The ITAT, Jodhpur, vide order dated 21.9.2007, partly allowed the appeal in ITA No. 601/JU/2006 for A.Y. 2003-04 of the assessee with the observation made at Page No. 3 vide Para No. 5 of the aforesaid order, which is reproduced as under:- Admittedly, the revenue has not filed any second appeal against the finding given by the CIT(A). This shows that the impugned order has been accepted by the department and assessment order to that extent stood merged with that of the Ld. CIT(A) s order. The Order of the ITAT, Jodhpur dated 21.9.2007 is subsequent to the change of jurisdiction over the assessee when order u/s. 127 of the I.T. Act was passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 37,83,185/- made by the Assessing Officer by increasing the G. P. rate by 1%. 4. Briefly stated the facts of the case are that the Assessing Officer initiated reassessment proceedings on the ground that the assessee had claimed depreciation on truck @ 40% which was not permissible, as in his opinion, the truck was used for the assessee s own business. However, while framing assessment, he inter alia, made the following disallowances: a. Bricks Production Expenses - ₹ 28,59,057/- b. Clay Excavation and Carriage Expenses- ₹ 6,98,382/- c. Expenditure on water course - ₹ 2,25,746/- Total RS.37,83,185/- The assessee assailed the finding of the Assessing Officer in the first appeal. The ld. CIT(A) he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant's own past results as also the comparable cases, if any. Provisions of sec. 145 exist on the Statute and it is the duty of the Assessing Officer to apply the same wherever the1acts so suggest. Not applying the provisions when they are really required to be invoked makes the provision on the Statute as redundant. In the instance case, the Assessing Officer by not applying the provisions of see. 145 made the same as redundant. The duty of the Assessing Officer is to correctly. Apply proper section and compute the correct taxable income. Even otherwise, it is established procedure in the department that in contractor's cases, where books of account are defectively maintained and vouchers are not produced or they are self made) not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , whether the trading addition on account of 1 % G. P. rate can be sustained? The Ld. CIT(A) has tabulated the figure of sales, gross profit and gross profit rate of this A.Y. as well as the immediately preceding two A. Ys. at page 31 of the impugned order. On a perusal of this table, it transpires that the assessee had declared G.P. rate of 7.55% in this year as against 6.47% of the preceding year. The Jodhpur Bench of the Tribunal has held in several cases that where the books of account are rejected, then recourse should be taken to the profit rate of the immediately preceding year unless facts justify departure therefrom. On a close examination of the G.P. rate declared by the assessee in this as well as the preceding year, it becomes p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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