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TMI Blog2022 (12) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... ement pertaining to the net profit earned by companies in similar line of business - However, apart from the statement, no other data has been brought on record to show that these companies are having business similar in nature to the assessee and merely computation of profit for the year under consideration was furnished. Therefore, the submission of the assessee to adopt the profit percentage of other companies also does not merit acceptance. In addition, there is no data available on record regarding the past performance of the assessee. Thus, no infirmity in the impugned order passed by the learned CIT(A) in estimating the income at 1% of the turnover. As a result, the grounds raised by the assessee are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... it is wrong on the part of the learned CIT(A) to confirm the action of the AO being an assessments u/s 144 r.w.s. 145(3). 3] She has further erred in estimating the income at 1 per cent of the total turnover, especially when there is no finding regarding incorrectness or completeness of the accounts and the method of accounting having been followed consistently by the assessee and thus the estimation has been made on the basis of pure guesswork. 4] No comparable case having being cited and there is no discussion of the past history of the assessee and thus it is wrong on the part of the authorities below to hold that the accounts are unreliable. 5] Complete explanation having being given with regard to cash withdrawals and cash depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even despite multiple opportunities, as noted in the assessment order, the complete details as sought were not furnished. Considering the inaccuracies and or incompleteness of the books and the fact that the assessee has failed to produce the books of accounts with supporting evidence, records, invoices, bills/vouchers, stock register, excise record/registers, the books of accounts of the assessee company were rejected under section 145(3) of the Act. The Assessing Officer ('AO') vide order dated 29/12/2006, passed under section 144 of the Act, inter-alia, disallowed the claim of excise duty in view of the provisions of section 145A of the Act. Further, the AO in absence of details of income and expenditure with supporting documentary evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) granted partial relief to the assessee and reduced the estimated income of the assessee from 2% to 1% of the turnover. The relevant findings of the learned CIT(A) are as under: "14. I have gone through the contention of the appellant as well as that of the AO. I have perused various details filed by the appellant. It is not in dispute that the appellant company was asked to produce stock register to verify the quantitative details of sales and purchased made Citing the year under consideration. However the same was not produced before the AO. Further this regard the appellant has submitted that the said stock records were maintained at the processor's end ie Ruch Soya's place which was in any case not produced before the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has relied on various judgements which in my considered view are of no avail since as a mandatory requirement the assessee is bound to value its stock at the year end to include element of excise duty and sales tax etc. which in the instant case the appellant has failed to demonstrate. Further it is also not in dispute that the appellant had not produced stock register where from the item movement could be verified and therefore from the details filed by the appellant it could not be said that proper income could be ascertained and hence as a necessary consequence the AO was required to reject the books of accounts Thus considering the fact that the appellant company has not filed any explanations in this regard, I am in agreement with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion of excise duty in closing stock as per mandatory requirement of section 145A and absence of stock records does lead to conclusion that accounts did not give the true picture of income of the assessee and hence the action of AO was justified. 14.2 However considering the facts of the case it is also seen that the AO has estimated the net income @2% of the turnover which considering the overall picture of the case and type of business the appellant is in appears to be an higher side and therefore in all fairness if the income is estimated @1% of the turnover would meet both the ends of justice and accordingly the AO is directed to re-compute the income @1% of the turnover." Being aggrieved, the assessee is in appeal before us. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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