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TMI Blog2019 (3) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee company. The trading addition so made by the AO and so confirmed by the ld CIT(A) are hereby directed to be deleted and the trading results so declared by the assessee are directed to be accepted. The issue regarding rejection of books of accounts so raised by the assessee thus becomes academic and we donot deem it appropriate to adjudicate the same on merits. Addition of 10% of telephone, conveyance & car maintenance expenses - CIT(A) confirmed the addition so made (except the addition on account of depreciation) holding that the assessee has failed to file any evidence which established that the observation made by AO are not correct - HELD THAT:- These are purely adhoc addition made by the Assessing Officer which ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing rejection of books of account of appellant and making trading addition of ₹ 2,00,000/-. 2. That the learned Commissioner of Income Tax (Appeals) has erred in law and in facts confirming disallowance to the extent of 10% of telephone expenses, Conveyance expenses, Car maintenance expenses totaling ₹ 65,448/-. 3. That the learned Commissioner of Income Tax (Appeals) has erred in law and in facts confirming disallowance to the extent of ₹ 99608, being 10% of total expenses on labour, staff welfare and office expenses. 2. Regarding Ground No. 1, briefly stated, the facts of the case are that the assessee is engaged in the business of manufacture and export of garments. During the course of assessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,74,89,232/- 16.38% 2012-13 21,94,42,178/- 3,10,21,762/- 14.14% 2011-12 18,23,14,671/- 2,19,60,696/- 12.05% 2010-11 10,81,70,678/- 12,95,33,64/- 11.97% It was further submitted that the books have been prepared on mercantile system of accounting, all accounting standards are followed and the inventory has been valued as per consisting accounting policy followed by the assessee. It was submitted that no specific defects has been pointed out by the Assessing Officer in maintenance of books of account and all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee on the basis of best judgement. Where the assessee has a settled past history, in such cases, accepted G.P rate for the past years in assessee s own case has been held by the Rajasthan High Court as proper and reasonable basis for estimation of G.P rate for the current year. In the instant case, the AO has made an adhoc trading addition of ₹ 2 lacs and in the process, has estimated the G.P rate of 16.47% on the declared turnover of the assessee and which has been upheld by the ld CIT(A). There is no basis which has been specified by the AO while making the addition of ₹ 2 lacs and we also find that the assessee s own past history has also not being taken into consideration. Once the books of accounts have been rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee are directed to be accepted. The issue regarding rejection of books of accounts so raised by the assessee thus becomes academic and we donot deem it appropriate to adjudicate the same on merits. 6. In Ground No. 2, the assessee has challenged the sustenance of 10% of telephone, conveyance car maintenance expenses amounting to ₹ 65,448/. As per Assessing Officer, the expenses in the profit loss account are related to such facilities which are certainly proved to be used for other than business purposes. The ld. CIT(A) confirmed the addition so made (except the addition on account of depreciation) holding that the assessee has failed to file any evidence which established that the observation made by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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