TaxTMI 
TaxTMI 
2012 (10) TMI 989
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....000/- which was made by the AO by rejecting th trading results and by applying G.P. rate of 17.71% as against 14.82% declared by the appellant as per books of account maintained in the regular course of business. 2. That the account books of the appellant were correct & complete and there was no defect and the same have been wrongly rejected. The lower authorities have erred in holding that the case of the appellant is covered by the provisions of section 145(3) of the Income Tax Act. 3. That the observation made are against facts and are based on surmises and conjectures and do not afford any legal justification to the estimate made for G.P. Rate. The details & explanations filed, submissions, made and the evidence placed on record hav....
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.... and accordingly the A.O. invoked the provisions of section 145(3) of the I.T. Act and applied the G.P. rate @ 17.71% as against 14.82% declared by the assessee and accordingly made an addition of Rs. 3,70,000/-. 4. The Ld. CIT(A) confirmed the action of the Assessing Officer. 5. The Ld. counsel for the assessee, Sh. Salil Kapoor, Advocate, argued that the assessee had maintained the complete stock register and it is a matter of record as is apparent from the paper book pages 23 & 24 and also from the explanation given vide letters dated 20.4.2009 & 24.4.2009. The assessee had maintained purchase/sales register and stock is recorded in term of quantity. Stock tally has been made on that basis. Though quality-wise register is not maintaine....
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..... 7. We have heard the rival contentions and perused the facts of the case. There is no dispute to the fact that the assessee is maintaining purchase/sales register where the stock is recorded in terms of quantity but the assessee is not maintaining any stock register on daily basis. Therefore, the working of the closing stock on estimation basis or by working out the average cost of production cannot be said to have been maintaining the proper books of account. In the absence of the same, assessee's accurate income cannot be deduced. Therefore, we find no infirmity in the order of the Ld. CIT(A), who has rightly upheld the invocation of provisions of section 145(3) of the Act by the A.O. 7.1. As regards the estimation of income, there i....