Arup Kumar Hazra Vs I.T.O. (ITAT Kolkata)
Assessing Officer has made the addition on estimate basis, without disturbing the opening stock, purchase and sales and closing stock of High Speed Diesel and Motor Spirit. The books of accounts of the assessee have not been rejected. The fact is that the assessee had maintained books of accounts and these were duly audited u/s 44AB of the Act. The purchases made by the assessee by the assessee of Motor Spirit and High Speed Diesel are only from Indian Oil Corporation Ltd. The lubricants were purchased from Haldia IOC Employees’ Welfare Co-operative Credit Society Ltd. All the purchases were made through proper banking channels. The sales were made in cash. The ld. D/R, does not dispute the fact that there would be shortage of stock in this line on account of spillage and evaporation. This fact is also recognised by the Government of India. The Assessing Officer has not found or pointed out any discrepancy in the books of accounts. When the books of accounts are not rejected, the Hon’ble Calcutta High Court in the case of Swadeshi Commercial Co. Ltd. vs. CIT (ITA No. 219 of 2001 dt. 18/12/2008) (Cal), held that gross profit cannot be estimated. The Assessing Officer has no evidence to come to a conclusion that the assessee had earned undisclosed profit. The entire addition was made on surmises and conjectures. Even otherwise, I find that the assessee has explained the issue with facts and figures. Under these facts and circumstances, the addition made by the Assessing Officer as sustained by the ld. CIT(A), is bad in law.
