9911796707
TMI Blog1978 (9) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... e not fully vouched. The assessee showed a G.P. of 17 per cent on a turnover of Rs. 1,74,561 for the asst. yr. 1971-72. The ITO took help of a comparable case, not discussed in the assessment order and adopted the rate of 21 per cent. Resulting in an addition of Rs. 6,891. The matter went up in appeal to the AAC who set aside the assessment order for the asst. yr. 1971-72 and directed the ITO to make a fresh assessment. The assessee was again asked to explain why the gross profit was low. Apparently, the fresh assessment order does not indicate that an opportunity was given to the assessee to produce comparable cases. The assessment order also does not indicate that the ITO did not himself took any trouble to bring on record comparable case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and conclusion of the AAC in the matter. In the earlier years, were find that the G.P. rate as shown by the assessee hovered between 11 and 15 per cent. The books results were accepted except for some minor additions here and there. Defects in the books of account by themselves do not warrant an addition unless it is established that the explanation offered for the low G.P. deserve to be rejected on valid grounds. The ITO did not take care to bring on record comparable cases. Trading conditions need not remain uniform from year to year. Apart from this, we find that in the earlier years the book results were accepted even though the gross profit shown by the assessee was at a lesser rate. Comparable cases were not brought on record and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsit amounted to Rs. 12,104. The AAC gave finding that this loss occurred in the regular course of the assessee's business and despite its best efforts, the assessee could not recover any amount from the French Party. The AAC therefore deleted the addition of Rs. 12,104. 8. The Departmental representative admitted that no reasons were given by the ITO in the fresh assessment order. He, however, added that in the original assessment order, a detailed description of the assessee's case had been given. He, therefore, took us through the original assessment order. It was pointed out that the assessee exported four parcels of Rubies and Emeralds of particular weight and description. These four parcels were unfortunately not accepted by the cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Departmental representative that the loss was wrongly allowed by the AAC. 9. On the other hand, the assessee pointed out that it had even taken up the matter with the Indian Embassy in Paris and was actually told that the party was not traceable. The assessee's counsel argued that these materials were supplied to the lower authorities and that it was not the assessee's fault if these facts were not properly appreciated by the ITO At any rate, he added, the assessee was not able to recover anything from the party for the goods exported and therefore, the loss should be allowed at least on this account. 10. We agree with the submission, made by the assessee and would uphold the action of the AAC in the matter. From the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch, 351 Collines Street, Melbourne, Australia and lost in transit in Australia. The above loss has been duly certified by the Post Authorities of India and Australia. As this loss of goods has happened in the regular course of the assessee's business, and as the ITO has not pointed out any material to prove his case for disallowance, I accept the assessee's contention in this regard and direct the ITO to allow the same." 12. The Departmental Representative was not able to successfully impugn or challenge the above finding of the AAC particularly in the face of the certificate issued by the postal authorities of India and Australia. The assessee relied ono the findings of the AAC. 13. In our opinion, the AAC's action was right for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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