1999 (11) TMI 117

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.... was conducted under s. 133A on 3rd March, 1989. The AO observed that during the course of survey cash was found short by sum of Rs. 22,756. Stock was also found short by an amount Rs. 4,983. It was further found during the course of survey that cash sales effected by the assessee were not being fully recorded in the books of account. It was found that cash memos were not issued on the date of survey in respect of cash sales aggregating to Rs. 9,640. The assessee declared gross profit rate of 5.99 per cent as against g.p. rate of 6.56 per cent declared in the immediately preceding year. The assessee submitted explanation for decline in g.p. rate. The AO did not accept those explanation and applied g.p. rate of 7 per cent. The AO thus made a....

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....under appeal. ----------------------------------------------------------- The learned counsel also drew my attention to the written submissions submitted before the Dy. CIT(A). He specifically pointed out that the AAC has applied g.p. rate of 6 per cent in assessee's case for asst. yr. 1984-85. The learned counsel also placed reliance on judgment reported in 29 STC 478 at p. 482 and Rajkumar Jain vs. Asstt. CIT (1994) 49 TTJ (All)(TM) 558 : (1994) 208 ITR 22 (All) (AT) at p. 42. The learned counsel pointed out that the AO has brought no material on record to justify the addition so made in the declared trading results. Shri Ojha, learned counsel, further explained that the discrepancy found in the course of survey were also properly e....

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....Hindustan Lever Ltd. on which a very nominal profit rate is allowed by the principal. The sales during the year under consideration have gone up. The assessee, however, could not submit proper explanation for the shortage in cash and stocks found during the course of survey. It is, therefore, a case where resort to estimation of g.p. may be justified. However, on a careful consideration of the entire relevant facts and particularly the fact that sales during the year under consideration has increased to Rs. 18,81,741 as against sale of only Rs. 8,30,464 in asst. yr. 1988-89.1 am of the view that it would be just and proper to direct the AO to restrict the addition in the declared g.p. by an amount of Rs. 6,000 only. The AO is directed to gr....