THE I.T.O. Vs. MANJU DEVI GOYAL

JUDGEMENT

(1.) THIS is an appeal filed by the department against the order dated 03/08/2011 passed by the learned CIT(A) -III, Jaipur for A.Y. 2008 -09. The effective grounds of appeal are as under: - -

(2.) THE assessee was engaged in the business of manufacturing of edible oil and oil cake from mustard seeds. She filed her return on 26/09/2008 for A.Y. 2008 -09 at Rs. 1,77,750/ -.This case was scrutinized U/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act). During the year under consideration, the assessee had declared gross profit at Rs. 37,00,329/ - on total sale of Rs. 9,09,21,461/ -, which gives a G.P. rate of 4.07%. The learned Assessing Officer compared the G.P. with immediate preceding year, which was 11.65% on total turnover of Rs. 18,47,468/ -. The Assessing Officer gave reasonable opportunity of being heard on decline of G.P. compared to preceding year and asked to produce complete books of account for verification. He found that the stock register had not maintained in term of quality wise, did not contain day to day detail of shortage. The static yield of oil was lower than the last year and defective closing stock of raw material as well as item produced, therefore, he rejected the book result U/s. 145(3) of the Act. He again gave show cause notice to the assessee on these defects pointed out in earlier para. After considering the assessee's reply and various case laws discussed by the Assessing Officer on page 5, it has been held that books of account maintained by the assessee did not reflect complete and correct profit and gain of assessee's business. He estimated the G.P. @ 7.86% (average of G.P. shown by the assessee in this year and previous year), which was resulted in trading addition of Rs. 34,46,188/ -.

(3.) NOW the Revenue is in appeal before us. The learned Sr. D.R. supported the order of the Assessing Officer and at the outset, the learned A.R. for the assessee argued that the learned CIT(A) had deleted the trading addition having considered the various contentions of the appellant including wrong finding of the learned Assessing Officer regarding non -maintenance of stock register etc. as reproduced at page No. 3 in the appellate order. The conclusion so arrived has been specifically recorded in para 2.3 of his order and reiterated the arguments raised before the learned CIT(A) and vehemently supported the finding of the learned CIT(A). He further argued as under: