2001 (8) TMI 294

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....r the assessee has submitted that the AO neither pointed out any defects in the books of account maintained by the assessee nor specifically invoked the provisions of s. 145 of the Act. He has, therefore, contended that the trading addition made in this case without rejecting the books of account and invoking the provisions of s. 145 was not justified. In support of this contention he has cited Dy. CIT vs. Mewar Textiles Mills Ltd. (1998) 64 TTJ (Jp) 502, Vinod Kumar Pramod Kumar vs. ITO (2000) 66 TTJ (Jd) 722, Ganesh Foundry vs. ITO (2000) 67 TTJ (Jd) 434, Prabhu Dayal Lallu Ram vs. ITO (1999) 63 TTJ (Del) 557, Shankar Rice Co. vs. ITO (2000) 67 TTJ (Asr) (SB) 84 and ITO vs. Satya Narayan Pareek (2000) 71 TTJ (Gau) 997. It is, however, obs....

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....c defects were pointed out by the AO in the books of account of the assessee on the basis of detailed facts and figures given in his order which tantamount to the rejection of book results and invoking the provisions of s. 145. 5. On merits the learned counsel for the assessee has submitted that while working out the surplus Bardanas/gunny bags the AO presumed that two bags are consumed for manufacturing 3 Kattas. In this regard he pointed out that considering the size of bag (44" x 28") vis-a-vis the size of a Karta (36" x 24") it is impossible to obtain 3 Kattas from two bags both lengthwise and widthwise and only one Katta can at the most be obtained from one bag. In support of this contention he also produced sample of gunny bag and ....

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....umption for preparing Kattas                               14,802  " Bardana sold with Churi              14,471  "                                      ----------- Sale of Bardana during the year       4,800  "   39,540 bags          &nbsp....

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....) The split pulses after removal of outer skin is wet which has to be got dried up in sun for driage and therefore, it is spread on old bags which are in fact lost and damaged after some time. (vi) Old bags are used by labourers for sleeping and sitting and at times they lift them away. (vii) There are few other processes where old bags get used up. Referring to the various purposes mentioned above, the learned counsel for the assessee has contended that the entire quantity of the balance Bardanas barring the quantity remained in the closing stock was exhausted by the assessee. He has also contended that considering the production of more than 55,000 qtls. handled by the assessee, the claim of consumption of bags is quite reasonable. ....