Brief of the case
Assesse, a manufacture of harvester combines. In course of assessment , assesse failed to produce books of accounts of its business .There was also a decline in G.P. rate to 10.59% from 11.25% in earlier years. There were also certain discrepancies in figures of closing stock. Therefore, AO thus rejected book results and estimated G.P. at rate of 12.5% of turnover.The assessee pleaded since it is not feasible to maintain stock register, therefore books should not be rejected CIT (A) upheld rejection of books , but considered G.P. rate taken by A.O. of previous year, i.e. 11.5%. Tribunal held that when books of accounts are rejected, estimation of profit is must. Tribunal also noted that there was no increase in turnover during relevant period. Moreover, it was also evident that CIT(A) considered past history of assesse for estimating profit. Tribunal thus upheld G.P. rate adopted by Commisioner (Appeal).
In course of assessment , A.O. made a disallowance of ‘ advertisement and publicity expenses ‘ on account of non-deduction of TDS u/s 194C. CIT(A) upheld AO’s order . Tribunal held that since GP rate had been determined on estimate basis , no other disallowance of any expense separately was called for. Imugned disallowance was therefore deleted.
Facts of the case
