AI Drafter 
TaxTMI 
TaxTMI 
2020 (3) TMI 1014
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....firm and is engaged in the manufacturing of hing and trading of dry fruits. It filed its return of income on 23rd February, 2010 declaring the total income at Rs. 3,15,210/-. During the course of assessment proceedings, the AO noted from the audit report in Form 3CD, Column No.8(a) that the auditors have remarked that the assessee "has not produced the stock register for verification. However, the physical stock has been verified and certified by the partners. The auditors have given the quantitative details of the items of goods traded, the details of which are as under:- Item Opening Stock Closing stock Gum NIL Rs. 3,68,381/- Hing NIL Rs. 1,26,76,945/- 4. He further noted that in column No.28(b) the auditor h....
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....sallowed interest payable amounting to Rs. 12,23,461/- in absence of filing confirmation. The assessee approached the CIT(A), who reduced the GP rate to 6.5% and, accordingly, confirmed the addition of Rs. 21,22,220/-. On further appeal by the assessee, the Tribunal dismissed the appeal. The assessee carried the matter to the Hon'ble High Court and the Hon'ble High Court, vide ITA No.743/2014, order dated 9th March, 2015, restored the issue to the file of the CIT(A) by observing as under:- "8. This Court has carefully considered the submissions both before the CIT(Appeals) as well as the ITAT. The assessee categorically appears to have submitted that a quantitative tally of all the raw materials consumed in the making/preparation o....
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....ave also considered the submission of the appellant submitted during the proceedings before me. I am of the opinion that the appellant is misusing the various appellate forums to gain some advantage. The fact of the matter is that the appellant, in spite of all his chest thumping with respect to the quantitative stock being maintained, the facts prove otherwise. Right from the first round of litigation the stand of the appellant has remained ambiguous. The appellant has been claiming that it is maintaining the qualitative and quantitative stock but the same was not found to be true by even Hon. ITAT. The appellant, again before me, has submitted the copies of ledger account of purchase of hing, gum, starch and oil. It records only the purch....
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....fficient. Hence I hold that the deficiency in the books of accounts is real. Therefore, I have no reason, argument or evidence to temper with the finding of my predecessor in his order No. 13/2013-14 dated 17/05/2013." 7. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:- "1. The learned CIT(A) has erred on facts as well as in law in sustaining the addition which is unjustified, unlawful and is based merely on surmises as is clear from his wrong observations made in page - 7 of his order in face of quantitative tally. 2. The learned CIT(A) is wrong in not referring to judgments of Hon'ble Delhi High Court and the learned Tribunals and not deliberatin....
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.... CIT(A), the assessee could not produce the quantitative and qualitative stock. The assessee has only submitted the copies of the ledger account for purchase of hing, gum, starch and oil. However, what quantity was used to make which quality of hing was not substantiated before the CIT(A) for which the ld.CIT(A) rejected the submissions made before him. The detailed reasoning for which the ld. CIT(A) rejected the book results has already been reproduced in the preceding paragraph. It is the submission of the ld. Counsel for the assessee that the accounts are audited and no defects were pointed out by the auditors; that due to dispute in the family, the turnover has come down and the GP has also fallen; and in subsequent years the business h....