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TMI Blog2017 (6) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... ) should be set aside". 4. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 3. Brief facts of the case are as under:- The facts of the case are that the assessee firm is a manufacture and exporter of leather goods. During the year, total export sales of Rs. 39,13,75,567/- had been shown, which includes transfer of goods worth Rs. 18,84,90,955/- from the Kanpur Branch. The assessee has gross profit rate of 17.43%. The G.P. rates for the A.Y.2008-09 & 2007-08 were 17.47% and 19.64% respectively, as communicated by the assessee to the A.O. The A.O. for reasons given in Para 2.2 of the order, was of the opinion that the G.P. rate for the A.Y. 2008-09 worked out to 17.85%. The assessee was, therefore, asked to explain reasons for fall in G.P. rate. Vide a written reply dated 18/11/2011, it was submitted that there was no change in the G.P. rate. The A.O. did not find the submission of the assessee acceptable. He has noted in the assessment order that the assessee did not file all the details called for as a result of which it was not possible to make requisite verifications. It was admitted by the assessee that tax at source had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of closing stock, non deduction of tax at source in respect of the various payments made, non recording of purchase made on 31/03/2009 either in sale or closing stock, fall in G.P., different parameters for working of comparative gross profit in different years, the book results of the assessee could not be accepted and the credit profits of the business could not be determined. He, therefore; applied the provisions of sec.145 of the I.T. Act, 1961. 4. The A.O. has concluded as under:- "To ascertain the income of the assessee, one method is to apply an enhanced G.P. rate to the enhanced sale. But the details furnished by the assessee clearly reflects that different parameter have been applied to work out gross profit rate in different assessment years. Therefore it will not be correct to apply high rate of gross profit to get correct profit. There is no other case similar in nature, whose parameters could be applied to this case to get the gross profit rate. The only option is to estimate his profit. Looking to the facts of the case and the various defects as pointed out, it will be fare to make an addition of Rs. 50,00,000/- to the returned income of the assessee firm. This wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. As regards the production of ledger, cash book, purchase book, etc., I find that on 04/10/2011, the assessee was required by the Assessing Officer to produce the ledger, cash book, vouchers of purchase and sales and expenses for the period 15/03/2009 to 31/03/2009 .on 12/10/2011. On 12/10/2011, it has been noted by the A. O. that no ledger or cash book as required was produced and only purchase book was produced. The assessee was asked to produce the ledger, cash book, journal, stock register and books audited along with the vouchers of last fortnight of March, 2009. As per the order sheet noting on 18/10/2011, the ledger, cash book and voucher of March, 2009, second fortnight were produced which were test checked by the A.O. No thereafter, there is no noting which would suggest that the A.O. required the assessee to furnish the journal again. Thereafter, further details were called for and on 18/11/2011, it has been noted that various issues raised during the hearing were discussed. The Assessing Officer has not pointed out any specific instance to show as to details of which expenses (other than the expenses on trade fair) were not furnished. He has also not shown satisfactori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest income of Rs. 6000/- to tax by way of claiming less expenditure and as such there is no income of the appellant which has not been offered to tax as claimed by the Appellant. I have perused the electricity bill for the month of March, 2008 and find that the amount of Rs. 6,000/- on account of S. D. interest has been reduced from the current month's bill amount of Rs. 61,469.19. Hence, the contention of the assessee is found to be correct. Instead of- claiming the gross expenditure on account of the electricity bill for the month, the interest income on account of the electricity deposit has been reduced from the electricity bill amount and only the net expenditure has been, claimed by the assessee. Hence; no addition of this amount of Rs. 6,000/- is to be made to the total income of the assessee. As regards the expenditure on trade fair, out of the total expenditure claimed of Rs. 43,16,701/-, the Assessing Officer has, after verifying the expenditure, reported that the expenditure of Rs. 41,83,3821- has been incurred on trade fairs. He has, however, observed that expenditure of Rs. 1,33,319/- seems to have been incurred towards personal expenses and is disall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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