TaxTMI 
TaxTMI 
2015 (9) TMI 1340
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....s return of income for A.Y. 2007-08 on 26.10.2007 declaring total income of Rs. 7,38,460/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) and the total income was determined at Rs. 1,31,97,653/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 29.11.2010 granted substantial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us and has raised the following effective ground:- 1. The Ld. Commissioner of Income tax (A) has erred in law and on facts in deleting the addition of Rs. 1,27,93,522/- made on account of suppression of profit. 4. During the course of assessment proceedings....
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.... of Unit - I which earns taxable income is wholly and patently wrong. The Id AO has miserably failed to take in to account the reality of the factual aspects of the business carried out by the appellant in two different units which is submitted by the appellant in the form of a chart from which the vast difference between two businesses in terms of product, process, raw materials, end users, yield, etc is very apparent. These vital differences in the two units have been ignored by the Id A.O . Without finding any defect or controverting the above differences, the approach of the Id AO in presuming the consumption and production of two totally different units needs only to be rejected and held to be against sanction-of the law. It hardly nee....
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....fects in the maintenance of accounts which will not enable the AO to work out the income of the assessee. The relevant observations of the Hon'ble Tribunal which have been reproduced in the submissions at para 8 are very significant. The Hon'ble Tribunal has held that section 145 cannot be invoked for carrying out business imprudently or when business results shown are not very good. The Tribunal has held that rejection of books cannot be done without pointing out the defects in accounts or-accounting method. The Tribunal has also relied upon the decision in the case of Madnani Construction Corporation P Ltd Vs CIT (2008) 296 ITR 45 (Gau) and CIT vs Rajnikant Dave (2006) 281 1TR 006 (All) .The decision of the Hdn'ble Gujarat Hig....
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....al to the revenue and consequently most adverse to the assessee they should be deemed to have exercised it in a proper and judicious manner. On consideration of the facts of the case and the detailed consideration of the issue as well as the appellant's submissions, I am of the opinion that the action of the AO in making the aforesaid addition cannot be approved. I hold accordingly. 5. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us. 6. Before us, ld. D.R. relied on the order of A.O. On the other hand ld. A.R. reiterated the submissions made before A.O. and ld. CIT(A) and further submitted that the finished product of both the units are different, the list of supplier, the manufacturing process, ....