1987 (11) TMI 96

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....ister was being maintained and the sales register was being maintained and the sales were not subjected to any quantitative check. According to the ITO, in the assessment for the asst. yr. 1980-81 and 1981-82 the provisions of s. 145 had been applied and these had even been approved by the IAC under s. 144B of the Act. The ITO also made a test check of certain transactions of sales effected by the assessee and came to the conclusion that the G.P. of 2.95per cent disclosed was on the lower side. This was also although the G.P. rate of the immediately preceding year was only 1.3per cent. The particulars of this test check are detailed in para-5 of the ITO's order. The ITO made the impugned addition on the following lines: On Maneklal Haril....

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.... the year under up appeal was the same as in the two immediately preceding years and this had even been accepted by the ITO in the assessment order. It was further submitted that although there was no stock register the assessee stand all along had been that the quantitative details were duly maintained and available in the relevant books of account maintained for this purpose (Jama Vahi and Udhar Vahi). According to the assessee, complete quantitative details comprising monthwise purchases and sales as also closing stock were available and had been submitted to the ITO in the course of the assessment proceedings. It was further submitted that the purchases and sales were also fully vouched. According to the assessee, the ITO had not been a....

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..... Learned counsel for the assessee, on the other hand, strongly supported the order of the CIT(A). He repeated arguments on line similar to the ones as before the CIT(A). His main argument however advanced on the following lines: (1) The G.P. was higher than in any of the earlier years. (2) All the relevant details pertaining to the purchases and sales, closing stocks comparative, cheque showing sales and purchases of 29 bales over different months and detraining the average G.P. as also the calculations rebutting the test check made by the ITO were duly furnished before the lower authorities. (3) The assessee's business started in 1979-80 and the book results were accepted by the ITO although the G.P. rate shown was much below the....