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TMI Blog2013 (7) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of ₹ 24,12,680/- on account of low Gross Profit, made by the A.O. after rejecting the books of account. ii) On the facts and circumstances of the case, the Ld.Commissioner of Income tax (A) ought to have upheld the order of the Assessing Officer. iii) It is, therefore, prayed that the order of the Ld.Commissioner of Income tax (A) may be set aside and that of the Assessing Officer be restored. 2. During the course of hearing, an additional ground was also raised by the Revenue, i.e. the Ld.CIT (Appeals) has erred in holding that the books of the appellant could not be rejected without any specific basis. 3. Since all the grounds are interconnected, the same are being disposed of by a common order for the sake of conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. It is observed by the AO that the assessee is engaged in manufacturing of Aluminum drawn-pipe. It is also observed by the AO that the assessee had maintained the stock register but some notings could not be explained. It is also observed by the AO that the stock register was maintained with all notings in pencil. It is observed by the AO that there is abrupt fall in the gross profit. The explanation of the assessee for fall in gross profit was not acceptable to the AO. It was submitted by the assessee before the AO that there were two jobs carried out by the assessee in earlier years. The rate for the two job- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic defects in the books of accounts of the appellant. It is also noticed that the various methods applied by the A.O. to work out the gross profit are sheer extrapolations, concoction and formulations without any scientific basis. In my considered view the books of the appellant cannot be rejected without finding specific defects. The appellant in this regard has rightly placed reliance on the cases of CIT vs Smt.Poonam Rani 326 ITR 223 (Del.), CIT vs Vikram Plastics & Others 239 ITR 161 (Guj.) (ii) The books of accounts cannot be rejected merely for declaration of low gross profit rate. During the appellate proceedings as well as assessment proceedings, the appellant has contended that the gross profit reduced due to the fact that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant has maintained stock register in respect of these parties also. Perusal of various annexures vide which the job work was formalized by the appellant reveals that the appellant is having complete records of raw materials received from the principals and return of unutilized raw material, finished goods and scrap to the principals. In the face of overwhelming and clinching evidences I am inclined to agree with the contentions of the A.R. that the stock register in respect of job work is also properly maintained. (v) It is noticed by the A.O. that the appellant is using enterprise resource planning software i.e. ERP software obtained from Godrej Group. This software is used for inventory Management. As the software requires precise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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