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TMI Blog2015 (7) TMI 1360X X X X Extracts X X X X X X X X Extracts X X X X ..... aw in upholding rejection of books of account of the appellant by the Assessing Officer u/s 145(3) of the I.T. Act, 1961 and in further upholding trading addition to the extent of Rs. 12,67,489/- by directing application of gross profit rate of 21.44% as against declared gross profit rate of 19.97%.'' 3.1 The solitary ground raised by the assessee is as under: ''Restricting the trading addition to Rs. 12,67,489/- against Rs. 20,94,790/- made by the AO without appreciating the fact that the AO had applied the gross profit rate of 23.87% as declared by the assessee himself in the A.Y. 2007-08.'' 4.1 Brief facts of the case are - assessee is engaged in the business of manufacturing, import and export of precious and semi-precious stones in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls. After all the Assessing Officer should have been satisfied about the values of Emerald, Rough Emerald, Ruby etc. declared in terms of 'Carats' as opening and closing stock. Just by saying that purchases and sales are verifiable the appellant does not get away from the responsibility of convincing the AO about the yield and wastage ratio. Therefore, the books of account were correctly rejected specially when the audit report filed with the return itself satisfies that the value of finished goods is estimated value. As per Hon'ble Rajasthan High Court decision in the case of Kansara Bearing (P) Ltd. , 270 ITR 235 last year's profit declared is the best guide to estimate the profit rate, in A.Y. 2008-09 the appellant has declared profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Reliance is placed in the case of Ashoke Refractories (P) Ltd. vs. CIT, (2005) 279 ITR 457 (Cal.) for the proposition that failure to maintain item wise stock register cannot result into rejection of books. The stock valuation methods are opinions based on estimates and variation in closing stock valuation amounts to change of opinion and cannot be made a basis for rejection of books when nothing adverse is found qua day to day and trading transactions. (iv) On similar grounds, books of account of the assessee were rejected in assessment years 2004-05 and 2005-06 by AO. In first appeal, the ld. CIT(A) reversed the rejection of books of account and upheld them which has been accepted by the Department, thus the record and method of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are procured in various shapes, sizes and it is practically impossible to maintain shapewise, size-wise and colour-wise stock of manufacturing & wastage as required by the AO. Since no defect whatsoever is pointed out in the sales, purchases and trading results of the assessee consequently, in our considered view the books of account cannot be rejected. Our view is fortified by the judgment of Hon'ble Rajasthan High Court in the case of Malani Ramjivan Jagan Nath vs. ACIT (supra). Thus we uphold the maintenance of books of account of the assessee and finding of ld. CIT(A) for rejecting them is reversed. 4.8 Coming to the quantum addition, since books of account of the assessee are upheld then nothing material remains to dwell on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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