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2. That the impugned order U/S 263 of the Worthy Commissioner of Income Tax being illegal deserves to be cancelled / annulled."

3. The assessee company is engaged in the business of processing and trading of buffalo meat. The return of income was filed on 27.09.2008 declaring nil income. The return was processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter 'the Act'). The case was selected for scrutiny through CASS and statutory notice u/s 143(2) was issued on 20.08.2009, which was duly served upon the assessee. From the details of trading results for the last three years, the AO observed that there was decrease in turnover during the year but there was slight improvement in the GP and NP rate. The AO examined the trading results on test check basis from the books of accounts produced and other details and documents furnished by the assessee. The AO noticed from the details of PF deducted and deposited that the assessee had deducted ITA NO.2837/Del/2013 employees share for PF regularly for the month of April, 2007 to March, 2008 but had deposited the employees' share of PF of Rs.9397/- for the month of February, 2008 on 24.03.2008 which was late i.e. deposited after the due date as specified in the concerned Act. Therefore, in view of the provisions of section 36(l)(va) read with section 2(24)(x) of the Act, the AO disallowed the said amount of Rs.9,397/- on account of PF deposited late after due date and added to the total income of the assessee. Accordingly, the assessment was completed u/s 143(3) on the total income at Nil.

"The assessee company is engaged in the business of processing and trading of buffalo meat. From the details of trading results for the last three years it is seen that there is decrease in turnover during the year but there is slight improvement in GP and NP rate. The trading results have been examined on test check basis from the books of accounts produced and other details and documents furnished by the assessee."

It may be seen that she has given a clear finding about having accepted the trading results after test checking the books of accounts and considering other documents and evidences produced. The issue of purchases therefore, stands covered and hence it wrong to assume that no finding in this regards has been given.

(viii) The CIT, before exercising his jurisdiction under Section 263 of the Act, must have material on record to arrive at a satisfaction."

We find that the assessee had filed before the AO the copy of the audit report, audited balance sheet along with its annexures for the year ending 31.03.2008 relevant for the assessment year under consideration. The AO has examined the books of accounts on test checked basis and has observed that the assessee company is engaged in the business of processing and trading of buffalo meat. The details of the trading results for the last three years show that there is decrease in the turnover during the year but there is slight improvement in the GP and NP rate. So, from the said fact that the AO had test checked the books of accounts of the assessee and has gone through the audited reports and balance sheet, it cannot be said that the AO has not examined the GP result of the assessee. We also find that in earlier years, the books of account of the assessee were accepted by the AO and so were the trading results. We find in the year under consideration, the assessee has shown GP rate of 7.04% whereas in the previous assessment year it was 6.42%, which has been accepted by the Department. We also find that pursuant to the impugned CIT order, the AO has passed the assessment order in pursuance to the 263 order of the CIT wherein the first direction in respect to verification of four major creditors were carried out and no addition was made by the AO while giving effect to the impugned order of the CIT. The only issue remaining in front of us is whether the ITA NO.2837/Del/2013 rejection of books of account by the CIT can be done by exercising the revisional jurisdiction and make addition of Rs.7,98,553/-. We find that as earlier stated that the audited books and balance sheet has been already test checked by the AO and found to be in order. Therefore, it cannot be called as a lack of enquiry by the AO. In the previous year's also, the department has been accepting books of accounts of the assessee, therefore, without pointing out any defect in the books of accounts just because there are certain inflated nature of purchases on account of cash payment cannot be the basis for rejection of books of accounts u/s 145 of the Act and moreover GP rate was more than the previous year. So, we do find merit in the appeal of the assessee and accordingly, the impugned order passed by the ld. CIT is set aside and the assessment order framed by the AO is restored.