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TMI Blog2017 (5) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... as not justified in estimating the Gross Profit for the year under consideration. One of the ground, which has been weighed with the learned tribunal in not accepting the Gross Profit ratio at 48.39% claimed by the respondent – assessee is, for the year under consideration the income has increased, and therefore, there was justification in decrease in the Gross Profit. Under the circumstances, the learned tribunal has rightly observed and held that the Assessing Officer was not justified in estimating the Gross Profit ratio at 53.32% against the claim of the respondent – assessee of Gross Profit at 48.39%. Whether the assessee is doing the huge turnover without maintaining site wise stock register, work-in-progress register - Held that:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instead of 48.39%, as declared by the assessee, revenue has preferred the present Tax Appeal with the following proposed questions of law; (A) Whether the Hon ble ITAT has erred in law and on facts in deleting the addition made on account of low Gross Profit without considering the facts of the case? (B) Whether the Hon ble ITAT has erred in law and on facts by not appreciating the facts arrived by the Assessing Officer that the assessee is doing the huge turnover without maintaining site wise stock register, work-in-progress register. [2.0] The respondent assessee filed the return of income for the Assessment Year 2007-08 declaring the total income of ₹ 12,64,190/- after set off carried forwarded loss of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring on behalf of the revenue has vehemently submitted that in the facts and circumstances of the case, more particularly, when the respondent assessee did not maintain the stock register site wise as well as item wise and on quantitative basis, Assessing Officer was justified in rejecting the books of accounts. It is further submitted by Shri Nitin Mehta, learned advocate appearing on behalf of the revenue that even the Assessing Officer was justified in restricting the diesel expenses to 30% considering the terms of contract with GMDC. [3.1] It is further submitted that once the Assessing Officer was justified in rejecting the books of accounts, thereafter the Gross Profit was required to be arrived at on estimation basis. It is sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the respondent assessee and restricted it to 30% considering the terms and conditions of the contract between the respondent assessee and the GMDC. The Assessing Officer thereafter and after rejecting the books of accounts made the estimation of Gross Profit considering the overall Gross Profit ratio declared in earlier years, which comes at 53.32%. Now so far as the findings recorded by the learned CIT(A) as well as the learned tribunal setting aside the action of the Assessing Officer in rejecting the books of accounts is concerned, though cogent reasons have been given and assuming that there was some justification by the Assessing Officer to reject the books of accounts, in that case, the Assessing Officer was required to do the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el expenses to 30% against the claim of the respondent assessee at 39%, what was weighed with the Assessing Officer was that in the contract between the GMDC and the respondent assessee it was agreed that GMDC will pay the diesel expenses to the extent of 30%, and therefore, the Assessing Officer restricted the diesel expenses to 30%. However, it is required to be noted that as per the terms and conditions of the agreement between the GMDC and the respondent assessee, GMDC agreed to pay diesel expenses to the extent of 30% only and whatever expenses above 30% was required to be borne by the respondent assessee, and therefore, merely because GMDC agreed to pay diesel expenses to the extent of 30% the Assessing Officer was not justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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