M/S. MASTERMIND PUBLICATION (INDIA) PVT. LTD.,MEERUT vs. DCIT, MEERUT

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘CAMP AT MEERUT’ BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No.721/DEL/2017 Assessment Year 2013-14 Mastermind Publication Vs DCIT, Circle-1, (India) Pvt. Ltd., Meerut. C/o M.L. Dhawan & Co., 326, Thapar Nagar, Meerut. PAN: AADCM 3466G (Appellant) (Respondent)

ITA No.734/DEL/2017 Assessment Year 2013-14 DCIT, Circle-1, Vs Mastermind Publication Meerut. (India) Pvt. Ltd., C/o M.L. Dhawan & Co., 326, Thapar Nagar, Meerut. PAN: AADCM 3466G (Appellant) (Respondent)

Appellant by : S/Shri S.K. Jain, Adv. Respondent by : Shri Yogesh Sharma, Sr.D.R. सुनवाई क� तारीख/Date of Hearing : 09/01/2019 घोषणा क� तारीख /Date of Pronouncement: 16/01/2019 ORDER PER N.S. SAINI, A. M. These are the Cross Appeals filed by the Assessee as well

as by the Revenue against the order of the ld. CIT(A), Meerut,

dated 30.11.2016 for the Assessment Years 2013-14. In the

2 ITA No.721/Del/2017 & 734/Del/2017

grounds of appeal of the assessee, assessee has raised the

following grounds as under:

“1. That the learned lower authorities erred in rejection the

trading results declared by the which are as per audited books of accounts. 2. That the rejection of trading results as declared by the

assessee by the lower authority is arbitrary, uncalled far and

illegal. 3. That the learned lower authorities erred in estimating/applying Gross Profit rate of 12.05% as against

Gross Profit declared at 10.34 by the assessee.

raised the following grounds as under:

“1. Whether in the facts and circumstances of the case, the

Commissioner of Income Tax (Appeals) has erred in law and facts in adopting the Gross Profit Rate of 12.5% in place of 15%

estimated by the Assessing Officer, despite being in agreement with the Assessing Officer, in principle, for rejection of trading

results in absence of any stock register but restricting the

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estimation of GP from 15% to 12.5% without assigning any reason for doing so and without establishing how the estimation made by the Assessing Officer was defective. 2. That in the facts and circumstances of the case, the order of the Commissioner of Income Tax (Appeals) may be set aside and that of the Assessing Officer be restored.” 3. The facts and issues involved in both the appeals are

identical; therefore, they are being disposed of together.

observed that the assessee is engaged in publication of books

(Montessori & Government Allotted Text Books). The assessee

company maintains regular books of account and filed tax

audit report as per provisions of Section 44AB along with the

balance sheet, profit and loss account, trading account which

was examined in the light of the documents filed/produced by

the assessee. The Assessing Officer observed that in absence

of stock register, the gross profit shown by the assessee @

10.34% cannot be accepted, therefore, he estimated the gross

profit @15% on the turnover of Rs.24,27,60,552/- and arrived

at a figure of Rs.3,64,14,083/-. The assessee had shown gross

4 ITA No.721/Del/2017 & 734/Del/2017

profit of Rs.2,51,09,821/-, therefore, he made an addition of

difference amount of Rs.1,13,04,262/- to the income of the

assessee on account of low gross profit.

to compute the gross profit by applying the rate of 12.5% in

place of 15% applied by the Assessing Officer and allowed

partial relief to the assessee.

assessee and Revenue are in appeal before us. At the time of

hearing before us, learned AR of the assessee has filed the

copy of order of the Delhi ‘C’ Bench of the Tribunal in the case

of the assessee itself for Assessment Year 2012-13 which is

placed at pages 12 to 15 of the paper book filed before us and

submitted that the Tribunal has held that books of account of

the assessee cannot be rejected merely on the ground of non

maintaining of stock register and consequently directed the

Assessing Officer to accept the returned income of the

assessee. He submitted that following the abovestated

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Tribunal order in the year under appeal, the addition made

should be deleted.

of the Assessee.

13 has held as under:

“3. The Tribunal has categorically held that in the nature of

assessee’s business which is publication of books it is not physical for maintaining stock register account and merely non maintaining of stock register cannot lead to rejection of books of accounts. Thus following the same judicial precedents, we hold that for this year also the trading result cannot be disturbed on the ground that stock register has not been maintained. Accordingly the addition made by the AO and sustained by the Ld. CIT(A) is deleted. Consequently appeal filed by the assessee is allowed and revenue’s appeal is dismissed.”

precedent, we delete the addition made by the Assessing

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Officer and sustained by the Ld. CIT(A). Consequently, the

appeal filed by the assessee is allowed and Revenue’s appeal is

dismissed.

the Revenue’s appeal is dismissed.

Order pronounced in the Court on this day, the 16/01/2019.

Sd/- Sd/- (KULDIP SINGH) (N. S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16/01/2019 Prabhat Kumar Kesarwani, Sr.P.S.