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TMI Blog2016 (10) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... re us are that assessee is a partnership firm engaged in the business of construction of flats. Survey action u/s 133A of the Act was carried out at the business premises of the assessee o 15.9.2008. Partner of the assessee firm admitted to have earned unaccounted income of Rs. 1,11,00,100/- over and above the regular business of the firm and offered to disclose the same during Asst. Year 1009-10. Return of income was filed on 24.09.2009 declaring total income at Rs. 1,00,17,890/-. The case was selected for scrutiny assessment and notice u/s 143(2) of the Act following by notice u/s 142(1) of the Act along with questionnaire was issued and duly served on the assessee. Books of accounts were produced along with audited financial statement. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see went in appeal before the first appellate authority. Ld. CIT(A) supported the action of ld. Assessing Officer in rejecting the books of account u/s 145(3) of the Act due to anomally in the books of account with regard to the closing work in progress. Ld. CIT(A) sustained the addition to the extent of Rs. 10,10,213/- on account of fall in GP and deleted the addition of Rs. 8,70,236/- towards unexplained cash credit u/s 68 of the Act. 4. Aggrieved, assessee is now appeal before the Tribunal and has raised following grounds of appeal :- 1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of Assessing officer in rejecting books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring. However, it is the duty of the Assessing Officer to pin point the malice and bring it out in the assessment order by marshelling the facts encompassing the same. In the case of low GP there could be inflated purchases or unrecorded sales. There is no such finding by the Assessing Officer, therefore, no addition should be sustained towards GP rate. Ld. AR referred and relied on the decision of the Co-ordinate Bench in the case of Ashok Kumar B. Modi vs. Addl.CIT in ITA No.1060/Ahd/2008 for Asst. Year 2004-05 and other vide order dated 20.4.2012. 7. On the other hand, ld. DR supported the orders of lower authorities and further added that the overstated closing stock in previous year could have been rectified by the assessee by filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all accepted the issue relating to GP rest of books result have been accepted. We further observe that ld. CIT(A) has sustained this addition towards lower GP rate at Rs. 10,10,213/- by observing as below :- 3.3 I have considered the facts of the case, basis of addition and submissions of appellant. The reason given by appellant for reducing the income during the year that in the earlier year income was shown at higher amount as the value of closing stock was overstated by Rs. 10,10,213/- therefore to correct the mistake, income was reduced by that amount during the year under consideration, does not seem convincing. The AO has rightly held that the books of account of assessee were duly audited by auditors and closing stock valuation has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect to determine the true picture of any concern and in the case of appellant, it has contradicted its own valuation of closing stock therefore the books of account maintained by appellant are not authentic and reliable. The conclusion drawn by AO is also supported by the judgment of Hon'ble High Court of Delhi in the case of Triveni Engineering and Industries Ltd. vs. CIT reported in 320 ITR 430 wherein it has been held that accounting method cannot be changed to suit the convenience of the assessee so as to deprive the Revenue of legitimate tax. In view of this, I sustain the conclusion drawn by AO of rejecting the books of account and estimating the profit. However, while estimating the profit, AO has observed that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eover, the appellant has shown the figures of closing stock at lower value in place of actual value* just to reduce his profit as per his convenience. This cannot be allowed. In this way also, addition of Rs. 10,10,213/- is liable to be sustained in the case of appellant. In view of above discussion, I hold that addition of Rs. 10,10,213/- is justified in the case of appellant in place of addition made by AO at Rs. 14,59,833/-. I, therefore, direct the AO to make the addition of Rs. 10,10,213/- only. Thus, the appellant gets part relief. This ground is partly allowed. 9. Further, we have also gone through the decision of the Tribunal referred to by the ld. AR in the case of Ashok Kumar B. Modi (supra) and find that the facts are quite dif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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