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TMI Blog2016 (7) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... the trading addition from Rs. 76,74,679/- to Rs. 9,44,204/- without appreciating the fact of the case and deficiencies pointed out by the AO. Grounds in Cross Objection "1. The ld CIT(A) has erred on facts and in law in confirming the trading addition of Rs. 9,44,204/- by applying the GP rate of 19.20% as against the GP rate of 18.31% declared by the assessee." 2. The assessee is engaged in the business of trading and export of sand stone and slate stone. The assessee filed return of income declaring total income of Rs. 1,73,13,520/- on 25.09.2008. The case was scrutinised u/s 143(3) of I.T. Act. During the year the assessee declared total turnover of Rs. 10,66,63,644/- on which the assessee earned gross profit of Rs. 1,95,35,216/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. 3. Being aggrieved by the order of the AO, the assessee carried the matter before the ld. CIT(A), who had allowed the appeal partly, which is given as under: "3.2.1 I have perused the facts of the case and the submissions of the appellant. The Hon'ble Third Member has upheld the rejection of books of accounts made by the Assessing Officer on the basis of the defects pointed out, in the assessment order. It is the appellant's contention that mere rejection of books of accounts should not necessarily result in trading addition provided the appellant is able to justify the trading result. In the instant case, the appellant has stated that 56.73% of the turnover consisted of grey stone and brown stone. In the case of grey sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given for decrease in GP rate with respect to 46.73% of total turnover. I am of the considered view that while there are justifiable reasons for a minor fall in GP rate, as compared to last year. The submission of the appellant does not give any reason for decrease in Gross Profit rate of 46.73% of the turnover. For the balance part of the turnover where reasons have been given, it is not possible to quantify the decrease in gross profit in the absence of stock book. In view of the above, the G.P. rate is estimated at 19.20% of the turnover which is slightly lower than the G.P. rate of the preceding Assessment Year. This will result a trading addition of Rs. 9,44,204 (19.2% of Rs. 10,66,63,644 - Rs. 1,95,35,216). Therefore the addition m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equested to confirm the order of the partly decided by the ld.CIT(A) in favour of the assessee. 5. We have heard the rival contentions of both the parties and perused the material available on record. Whatever defects pointed out by the AO are sufficient to reject the book results as purchases as well as payments of expenses were made in cash which has not been controverted by the AR. Therefore, we upheld the rejection of books of account u/s 145(3) of the IT Act. The Co-ordinate Bench has considered the assessee's cases from A.Y.2006-07 to 2008-09 for identical additions made by the AO by rejecting the books of accounts. It is general that GP rate cannot be constrained. The assessee has given cogent evidence for decline of the GP rate whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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