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5. Briefly, the facts of the case are that the AO made addition of Rs.15,30,398/- on account of low gross profit by rejecting the books of account. The AO observed that the assessee was engaged in the business of sale of grey cloths manufactured on its own machine and getting it manufactured on job work basis from other parties whereas in earlier years the assessee carried out activity on its own machine only. The gross profit rate in the year under consideration was 4.31% compared to 19.96% last year. When required to explain the same, the assessee gave detailed working of two financial years in respect of production and sale on its own machine and job work from outside parties and stated that the gross profit in respect of own production was 14.52% and was 0.26% in respect of job work production in the preceding financial year 2003-04. The chart was reproduced by the AO on page 3 and 4 of the assessment order. The assessee stated that the gross profit of the two years cannot be compared, since there was no production through job work in earlier year. The AO did not accept the contention of the assessee and held that there is no justification in the explanation of the assessee that cost of purchase of raw material increased and finished goods were M/s. P. T. Synthetics sold at lower price. Further, no quality wise stock register and production register was produced by the assessee nor any day to day consumption register was maintained. Further, opening and closing stock in terms of quality, rate of value is not verifiable. The AO, therefore, rejected the book results u/s 145(3) of the IT Act and he worked out the production for the year under consideration by estimating gross profit rate at 20.24% as in the last year and made the addition. The addition was challenged before the learned CIT(A) and it was submitted that that the assessee achieved turnover of Rs.736 lacs as against 200 lacs in the earlier year. Therefore, there was increase of almost 268% in the turnover. No specific defect in maintenance of books of account has been pointed out and valuation of the closing stock was accepted. It was explained that all expenses were paid through account payee cheques and complete details were maintained. Sale and purchase details were maintained. The submission of he assessee in detail are noted by the learned CIT(A) in the impugned order in which it was also explained that there was a strike in textile industries on account of levy of excise duty. Therefore, there was a recession in the market in the first quarter. The assessee relied upon the decision of the Tribunal in support of the contention that on such facts no addition can be made. The learned CIT(A) considering the submission of the assessee and material on record noted that the book results have been rejected on the ground of decrease in the gross profit disbelieving the explanation of the assessee that purchase cost increased during the year under consideration and the finished goods were sold at lesser price in order to achieve turnover and that the assessee has not maintained day to day record of consumption of raw material and opening and closing stock were not verifiable. However, it was found that the observations of the AO are not correct. The learned CIT(A) noted that complete details were produced at the assessment stage along with evidences which support the submission of the assessee. Complete quantitative details of finished goods and details M/s. P. T. Synthetics of day to day stock register have been filed. Therefore, rejection of the book results has been done arbitrarily. The learned CIT(A) noted that in the instant case the assessee has maintained detail stock register on day to day basis comprising of details of purchase, production and sales. The AO has not found any instances of unaccounted purchase or sales. All purchases and sales were confirmed by the parties. No specific defect has been pointed out in maintenance of the account. Therefore, rejection of book results is not in order. The learned CIT(A) thereafter noted that the turnover of the assessee has increased by more than 3.5 times and increased turnover would normally result in increase in over all profit. Hence, gross profit has decreased. The learned CIT(A) accepted the contention of he assessee regarding destruction of file and documents through photographs. However, he has confirmed the addition of Rs.5,00,000/- because some disallowance out of the purchases shall have to be made and it was directed that the AO shall restrict the addition made on account of gross profit to this amount only.