1990 (7) TMI 140

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....cantile system and adopts S.Y. as its previous year. The S.Y. 2037, relevant to the asst. yr. 1982-83, which is under consideration, ended on 30th June, 1981. At the assessment proceedings the ITO noted that the assessee firm had done the job work exclusively for its sister concern M/s K.J. Vakhariia but in doing that the assessee firm had charged less amounts than what would have been chargeable by it for such work. The ITO deal with the point in paragraph 13 and 14 of his order in the following manner: "13. Now presuming that there was no nexus between M/s K.J. Vakharia and M/s Vakharia Traders as discussed at length above, the normal charges for comparable quality prints (M/s K.J. Vakharia has got a good name in the market thus it is p....

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....s K.J. Vakharia, aforementioned, and understatement of profits by the assessee-firm. We, however, do not agree with this approach of the learned D.R. 2.3. It is not disputed that the assessee firm has done the job work exclusively for its sister concern M/sK.J.Vakharia. It could also not be disputed before us that the GP returned on the total receipts were certainly higher than that of the immediately proceeding year, as has been found by the learned CIT(A). It could also not be disputed before us that not only in the immediately preceding year but also in the subsequent assessment years no addition of the nature as had been now made by the ITO, were ever made. The addition, according to us, was based by the ITO merely on conjectures and ....