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TMI Blog2006 (10) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1982-83. 3. Briefly stated, the facts giving rise to the present reference are as follow : 4. The assessee is a registered firm and carried on the business of sale of tin sheets only for the assessment year as alleged by it. It disclosed a returned income of Rs.38,601. The gross profit shown was 4.2 per cent. The Income Tax Officer while framing the assessment order considered the gross profit rate as low and on the basis of a comparable case of M/s United Trading Company as mentioned in the assessment order and also on the ground that no stock register was maintained, made an ad hoc addition of Rs.15,000 in the trading account and further made a disallowance of Rs.2,000 out of travelling expenses and Rs.1,000 out of other expenses. The assessee, being aggrieved, filed appeal before the Appellate Assistant Commissioner, Lucknow. The Appellate Assistant Commissioner sustained the addition of Rs.15,000 and also other disallowances and dismissed the appeal. The assessee, being aggrieved, preferred appeal before the Tribunal. The Tribunal reduced the addition of Rs.15,000 to Rs.13,000 and sustained the disallowance of Rs.2,000 out of travelling expenses on account of persona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the various pleas raised by the learned counsel for the parties. 9. We find that it is not in dispute that the applicant firm which has been newly constituted, carried on the business of sale and purchase of tin sheets. It had not produced the stock register before the Income-tax Officer. An inference was drawn by the Assessing Authority that no stock register had been maintained. Under such circumstances, an ad hoc addition of Rs.15,000 was added to the trading result after comparing the gross profit rate of 4.2 per cent. disclosed by the applicant with that of 6 to 7 per cent. disclosed by the United Trading Company. It is also not in dispute that the applicant had surrendered a sum of Rs.30,000 as cash credit which it had deposited in the name of M/s Vijay Tin Works in its books of account. Under section 145 of the Act, as it stood during the relevant period, the Income-tax Officer had the power to make an assessment upon such basis and in such manner as he may determine where the accounts are correct and complete but the method employed is such that in his opinion the income cannot be properly deduced therefrom or where he is not satisfied about the correctness or comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case of Pandit Bros. [1954] 26 ITR 159 the Punjab High Court has held that the fact that the profits are low is merely a warning to him to look into the accounts more carefully and to see that there is material to lead him to the conclusion that there is something false in the account books. The mere fact that the profits are low is not material upon which a finding under section 13 can be based, because the assessee may be incompetent or his methods of business may be uneconomic. Again, the fact that there is no stock register only cautions him against the falsity of the returns made by the assessee. He cannot say that merely because there is no stock register the account books must be false. In the aforesaid case, the accounts book were accepted by the Assessing Authority as correct and disclosing a true state of affairs which is not the case at hand and, therefore, no advantage can be drawn by the applicant from the aforesaid decision. 12. In the case of S.Veeriah Reddiar [1960] 38 ITR 152, the Kerala High Court has followed the decision of the Punjab High Court in the case of Pandit Bros. [1954] 26 ITR 159 and has held that the absence of any register or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d void." 14. In the case of Rajni Kant Dave [2006] 281 ITR 6, this Court has held that if an assessee has maintained the accounts book prescribed by Rule 6-F of the Income-tax Rules, 1962 and section 44AA of the Act, unless any defect is pointed out in the maintenance of such books, merely because the Assessing Authority desires some other accounts book to be maintained over and above what was required by Rule 6-F of the Rules, recourse to the provisions of sub-section (1) of section 145 of the Act could not be taken. The aforesaid decision is of no help to the applicant as, in the present case, we find that the applicant had not maintained the stock register which he was otherwise required to be maintained. It is to be remembered that the stock register is required to be maintained by an assessee in order to enable the Assessing Authority to verify the stocks and to arrive at a conclusion as to whether the trading result disclosed by the assessee is correct or not. In the absence of any such register having been maintained or produced before the Assessing Authority, an inference can be drawn that the account books do not disclose the correct picture of the trading result. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad hoc addition of Rs.13,000. 19. So far as the question of production of the stock register at the time of hearing of the appeal constituted an additional evidence or not, we may mention that admittedly the stock register was not produced by the applicant either before the Assessing Authority or before the Appellate Assistant Commissioner in the appeal preferred under section 246 of the Act. However, an effort was made, for the first time, to produce it before the Income Tax Appellate Tribunal. As the stock register had not been produced before the authorities below, it definitely constituted additional evidence. Under sub-rule (4) of Rule 18 of the Income Tax (Appellate Tribunal) Rules, 1963 the additional evidence can be filed alongwith an application stating the reason for filing such additional evidence. Sub-rule (5) of Rule 18 of the Income Tax (Appellate Tribunal) Rules, 1963 prohibits a party from submitting any supplementary paper book except with the leave of the Bench and under sub-rule (6) paper/paper books not conforming to the above Rules, are liable to be ignored by the Tribunal. Thus, any party cannot file any additional document as a matter of right which was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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