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TMI Blog2022 (3) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... erent warehouses, through bills or challans. Lump-sum payments were made to the different suppliers throughout the year. All the records, i.e., books of account, sales and purchase vouchers had been fully produced by the assessee - Assessing Officer had, however, prepared month wise trading account and had found negative stock in the books of account of the assessee. Although, the Assessing Officer had not found any unrecorded purchases, but had, in his own way, prepared the trading account for enhancing the gross profit. No sales were found outside the books of account. AO could have made the assessment as per the provisions of the Income Tax Act, 1961. In the subsequent assessment years, the AO had passed the order u/s 143(3) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer had prepared the trading account and as per the same, the gross profit of the assessee came out to be ₹ 36,39,54,887/- against the sales of ₹ 71,24,69,335/- and, as a result, the gross profit rate came to 51.8%. Consequently, an addition of ₹ 14.48 crores was made by the Assessing Officer, vide order dated 30th December, 2011. Assessee had filed an appeal before the Commissioner of Income Tax (Appeals), Shimla against the order passed by the Assessing Officer and the appeal filed by the assessee was partly allowed, vide order dated 2nd May, 2014. The department challenged the order dated 2nd May, 2014 before the Income Tax Appellate Tribunal Division Bench, Chandigarh and the said appeal was dismissed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8% is calculated as follows. Opening Stock 18,508,041.00 Sale 712,469,335.88 Purchases 348,348,793.00 Closing Stock 18,342,386.00 GP 51.08 % 363,954,887.88 Total: 730,811,721.88 Total 730,811,721.88. 6. It was also observed by the Assessing Officer that the assessee had failed to explain why the payment made to Sai Purna Caters without deducting T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat assessee made genuine purchases and sales which were entered into the books of account of the assessee. The Assessing Officer also did not consider the nature of business of assessee, was based on multi level marketing system where the goods were received through-out the year by different warehouses at separate stations. The goods were received either through bills or through challans. After receipt of intimation of goods, the lumpsum payments were made to different suppliers through out the year. No defects in the purchases and sales have been pointed out by the Assessing Officer. The assessee produced complete books of account, sales and purchase vouchers. However, the Assessing Officer, on imaginary basis, prepared month-wise trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f facts and material on record correctly came to the conclusion that at the most, the Assessing Officer should have rejected the book results under section 145(3) of the Act. The ld. CIT(Appeals) also correctly did not accept the conclusion arrived at by the Assessing Officer by preparing month-wise trading account for making addition because it would give distorted results. The rejection of the books of account Id. CIT (Appeals) under section 145(3) of the Act have not been challenged by the revenue as well as by the assessee. Therefore, finding of fact recorded by ld. CIT(Appeals) for rejection of the books of account under section 145(3) has become final. Therefore, the question left for consideration would be whether Id. CIT(Appeals) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. The Assessing Officer was, therefore, not justified in adopting GP rate of 51.08% for making addition against the assessee. The Id. CIT (Appeals), on proper appreciation of facts and material on record in the light of the decision of ITAT Chandigarh Bench in the case of M/s Saqi Brothers (supra) as confirmed by the Hon'ble Punjab Haryana High Court, rightly allowed the relief of ₹ 13.60 Cr. We do not find any infirmity in the order of the ld. CIT (Appeals). 10. The departmental appeal is, therefore, dismissed. 9. Thus, in the present case, Appellate Authority as well as the Tribunal have carefully gone through the record of the case and have found that the Assessing Officer had computed month wise and qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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