TaxTMI 
TaxTMI 
TaxTMI 
2014 (8) TMI 714
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....adequate inquiry but not the case that no inquiry was made by the Assessing Officer. Reliance was placed upon the decision in ITA No. 79/2014, the case of Hulas Rahul Gupta, order dated 26.2.2014 CIT Vs DLF Ltd. 350 ITR 555 and Spectra Sarees and Scripts Pvt. Ltd. Vs CIT 354 ITR 35 (AP). Plea was also raised that the only ground on which revisional jurisdiction was invoked is lower net profit rate, therefore, while coming to this conclusion past history of the assessee was not looked into. On the other hand, the ld. DR strongly defended the order of the ld. Commissioner and placed reliance upon the case which is already discussed in the impugned order. 3. We have considered the rival submissions and perused the material available on record. We note that while invoking revisional jurisdiction u/s 263 of the Act, the ld. Commissioner found that the net profit shown by the assessee is quite low and also there is a decline in net profit in comparison to last year. In view of the decision from Hon'ble Apex Court in M/s Malabar Industries, the ld. CIT found the assessment order as erroneous as well as prejudicial to the interest of Revenue. While coming to this conclusion the ld. Commis....
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....s etc. is not available. iii) In para 28(a) of form 3CD, the tax audit report, which is signed by one director Ms Manisha Jain, it is stated that the quantitative details are as per Annexure-1. However, there is no Annexure-l in the entire tax audit report and final accounts. Vide reply dated 10.6.2010 to unanswered queries raised through section 142(1) of the Income-tax Act, 1961 dated 28.1.2010, the assessee vide para-15 of the said letter has stated as under: "15. Inventory of opening and closing stock (both quantitatively as well as qualitatively) for each item separately. Also give basis of valuation of stock. The detail of this query is very exhaustive and my assessee needs more time to comply (actually compile) the same. However the value wise details are as follows: Particulars Amount (Rs.) Opening stock 1,16,28,138.00 Closing stock 1,17,78,948.00 iv) The assessee was issued notice u/s 142(1) on 28.01.2010 whereby several queries were raised. Regarding furnishing quantitative and qualitative details of stock inventories vide reply dated 03.06.2010 it answered- "The answer to this question will furnish in next opportunity." v) It is reiterated the books of a/cs were ....
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....t all is not well with the books and the same, cannot be relied upon to assess the income, profits or gains of an assessee. In such a situation, the authorities would be justified to reject the account books under section 145(2) [Awadhesh Pratap Singh Abdu Rehman & Bros. v. CIT, (1994) 210 ITR 406, 408 (All)". "Where there was no quantitative tally of opening stock and purchases with sales and closing stock, the best course to follow would be to reject the books result and to estimate the business income under section 145(2) [Rainbow Metals (India), In re, (1995) 83 Taxman 160, 166 (ITSC, Bom)]" "The absence of quantitative tally of purchases and sales added with unexplained lowness of gross profit rate is sufficient material to attract application of the first proviso to section 145(1) [Dhondiram Dalichand v. CIT, (1971) 81 ITR 609 (Bom)." "The Patna High Court, in Ram Chanda Singh Ramnik Lal v. CIT [(1961) 42 ITR 780] has, however, sustained rejection of account of an earth excavation contractor (without referring to Pandit Bros.'s case) on the ground that the assessee had not maintained a stock register and had not accounted for material supplied by the contractor, not mainta....
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....rame the assessment. The aggrieved assessee is in appeal before the Tribunal. Broadly we are in agreement with the conclusion drawn by the ld. Commissioner and are of the view that the net profit shown by the assessee is very low, therefore, the assessment order is not only erroneous but certainly prejudicial to the interest of Revenue. We further note that the Assessing Officer has not considered the true facts and even has not compared the like business of other assessee and merely accepted the version of the assessee. The Hon'ble Apex Court in a celebrated case of Malabar Industries Company Ltd. 243 ITR 83 clearly held that in correct assumption of facts or in correct application of law will satisfy the requirement of order being erroneous. It is clearly oozing out that the ld. Assessing Officer merely accepted the version of the assessee and made a lump sump addition of Rs. 1,50,000/- . Even the assessee valued opening and closing inventories on lump sump basis. The assessment has been framed in slip shot manner and merely it has been mentioned that the assessee furnished the required details. It was the duty of the Assessing Officer to verify the details furnished by the asses....