1997 (2) TMI 153

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..... , 1066 1067/Ahd/1992 (Assessee's Appeals) ITA Nos. 1367, 1368 1369/Ahd/1992 (Revenue's Appeals) 4. In these cross-appeals the main contention of the assessee and the Revenue is against estimation of gross profit. After examining the books of accounts the AO was of the view that quantitative details in respect of the materials purchased, issued, etc. are not available and there is no stock check for quantity of materials purchased. He applied the provisions of s. 145(1) and adopted a GP rate of 20 per cent for the asst. yr. 1985-86, 15 per cent for asst. yr. 1986-87 and 20 per cent for the asst. yr. 1988-89. The learned CIT(A) after considering the submissions of the assessee directed to estimate GP rate at 6 per cent for asst. yrs .....

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..... ted out that in the relevant years only small work had been done and the profit was estimated on the basis of valuation of work-in-progress. He argued that the margin shown by the assessee was reasonable. Moreover, the learned CIT(A) did not properly appreciate the escalation of the cost of construction from the date of obtaining the contract and construction made in these assessment years. 6. The learned Departmental Representative, on the other hand, submitted that in the absence of complete quantitative details and periodical records of issue and consumption of materials the GP shown by the assessee was rightly rejected by the AO and the learned CIT(A) reduced the same drastically without properly considering the observations of the A .....

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..... in this case, no comparable case even had been brought into record. The Hon'ble Madhya Pradesh High Court in the case of Dinanath Dubey vs. CIT (1986) 57 CTR (MP) 233 : (1986) 160 ITR 1 (MP) had held that where the rejection of books of accounts of the assessee is not in controversy application of profit in accordance with that applied in the earlier years adopted by the Tribunal is justified. It is further noted that in the asst. yr. 1983-84 which was originally completed under s. 143(1) assessee declared GP at 4.66 per cent and the assessment was reopened and though the fresh assessment which has been concurrently made with the present assessments under appeal, no addition has been made in respect of GP. In these circumstances, we do not .....

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