SHIV NANDAN PRASAD & SONS,MEERUT vs. ITO, WARD-3(5), HAPUR

The appellant, Shiv Nandan Prasad & Sons (hereinafter referred to as ‘the Assessee’) by filing the present appeal, sought to set aside the impugned order dated 23.11.2017 passed by Ld. CIT (Appeals), Muzaffarnagar qua the Assessment Year 2013-14 on the grounds inter alia that :-

Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee has challenged rejection of books of account under section 145 (3) of the Income-tax Act, 1961 (for short ‘the Act’) by Assessing Officer as well as ld. CIT (A) and estimated the gross profit at 8% as against 6.32% disclosed by the assessee and thereby making addition of Rs.3,16,210/-.

Assessee carried the matter by way of an appeal before the ld. CIT (A) who has confirmed the addition by partly allowing the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal.

We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

Undisputedly, the assessee has failed to furnish the stock register containing quality-wise detail of the timber purchased and sold by him. It is the case of the assessee that he has prepared timber chart, available at pages 28 to 41 of the paper book, containing quality-wise detail of the timber. However, the ld. AR for the assessee fairly conceded at Bar that quality-wise register has not been maintained by the assessee.

When the assessee has been purchasing and selling timber of different qualities, the books of account cannot be said to be complete without qualitative details entered into the stock register.

Then ld. AR for the assessee proceeded to argue that the Gross Profit (GP) rate of 8% estimated by ld. CIT (A) is on higher side. During the course of arguments, the ld.AR for the assessee as well as ld. DR for the Revenue stated at Bar that fair and reasonable GP rate may be estimated by the Bench keeping in view the facts and circumstances of the case.

The ld. CIT (A) estimated the GP rate @ 8% by comparing GP rate of assessee with M/s. Shiv Nandan Prasad Jai Prakash, Hapur, who has shown GP rate of 7.76% for AY 2010-11.