M/s. Chopra Agencies, Phagwara V. Income-tax Officer, Phagwara

ITA 105/ASR/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2222 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-06-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 15-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Assessee Lawyers: PIYUSH BANSAL
• Keywords: Gross profit estimation
• Section: 143(3); 145; 10

Judgement Text

1 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 105 (ASR)/2013 ASSESSMENT YEAR: 2007-08 PAN: AAEFC4255F M/S CHOPRA AGENCIES, VS. INCOME TAX OFF ICER, BACKSIDE OLD SABJI MANDI, WARD-I, PHAGWARA PHAGWARA (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PIYUSH BANSAL, C.A. RESPONDENT BY: SH. R.L. CHHANALIA, D.R. DATE OF HEARING: 11.06.2013 DATE OF PRONOUNCEMENT: 13.06.2013 ORDER PER BENCH 1) THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 30.11.2012 PASSED BY LEARNED CIT(A), JA LANDHAR, ON THE FOLLOWING GROUNDS: I. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN CO NFIRMING THE ACTION OF LEARNED A.O. TO REJECT THE BOOKS OF ACCOU NT. II. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN ESTIMATING THE G.P. RATE OF 9% INSTEAD OF 6% AS DECLARED BY THE AS SESSEE. 2 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 III. THAT THE ESTIMATION OF G.P. @ 9% IS MADE WITHOUT AN Y JUSTIFICATION AND WITHOUT ANY MATERIAL PLACED ON RECORD. IV. THAT AS CLAIMED IN ABOVE GROUNDS OF APPEAL, THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS), JALANDHAR, CO NFIRMING THE REJECTION OF BOOKS AND ESTIMATING THE G.P. @ 9% BE SET-ASIDE AND THE RETURNED INCOME BE ACCEPTED. V. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D, MODIFY, SUBSTITUTE, DELETE AND/OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING, IF NECESSITY SO ARISES. 2) THE ASSESSEE-FIRM FILED ITS RETURN OF INCOME ON 31.10.2007 DECLARING AN INCOME OF RS 5,392/-, WHICH WAS PROCES SED UNDER SECTION 143(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE A CT). THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 26.09.2008 WHICH WA S SERVED UPON THE ASSESSEE. ASSESSING OFFICER ALSO ISSUED STATUTORY N OTICES TO THE ASSESSEE, IN COMPLIANCE WHICH, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED INFORMATION/DO CUMENTS ALONG WITH BOOKS OF ACCOUNT ETC., WHICH WERE CHECKED BY THE AS SESSING OFFICER. THE ASSESSING OFFICER EXAMINED THE CASE OF THE ASSESSEE IN DETAIL AND ASKED THE ASSESSEE TO FILE QUANTITY, QUALITY AND VALUE-WI SE DETAILS OF OPENING STOCK (RS. 31,40,808/-) AND CLOSING STOCK (RS. 42,9 7,510/-) VIDE THE OFFICE QUESTIONNAIRE DATED 08.05.2009. THE ASSESSING OFFIC ER ALSO ASKED THE ASSESSEE VIDE ORDER-SHEET ENTRY DATED 29.10.2009 TO PRODUCE QUANTITY AND VALUE-WISE CLOSING STOCK AS VALUED AND CERTIFIED BY PARTNERS ON 3 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 31.03.2007 AND ALSO THE COPY OF STOCK STATEMENT GIV EN TO THE BANK FOR HYPOTHECATION FOR OBTAINING LOAN. IN COMPLIANCE TO THE SAME, THE ASSESSEE HAS NOT FILED ANY DETAILS AS ASKED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER VIDE ORDER-SHEET ENTRY DATED 22.12.2009 ASK ED THE ASSESSEE TO SHOW-CAUSE AND EXPLAIN AS TO WHY ITS BOOKS OF ACCOU NT BE NOT REJECTED IN THESE CIRCUMSTANCES AND G.P. BE NOT COMPUTED @ 18% AS DONE IN THE CASE OF SIMILAR CONCERN I.E. BHATIA DEPARTMENTAL ST ORE, PHAGWARA, HAVING SAME TRADE I.E. TRADING IN PLASTIC AND CROCKERY GOO DS ETC. WHICH WAS SHOWING G.P. @ 18%. IN RESPONSE TO THE SAME, ASSESS EE FILED ITS REPLY WHICH THE ASSESSING OFFICER HAS REPRODUCED AT PAGE NOS. 2 AND 3 OF HIS ASSESSMENT ORDER. ASSESSEE MAINLY CONTENDED THAT HI S BOOKS OF ACCOUNT COULD NOT BE REJECTED ON ACCOUNT OF LOW G.P. RATE O R FOR NON-MAINTENANCE OF STOCK REGISTER BECAUSE THE DULY AUDITED ACCOUNTS OF THE ASSESSEE-FIRM HAS BEEN ACCEPTED BY A QUALIFIED CHARTERED ACCOUNTA NT, WHO HAS REPORTED THAT THE FINANCIAL STATEMENTS ARE IN AGREEMENT WITH THE BOOKS. 3) ASSESSING OFFICER VIDE ORDER-SHEET ENTRY DATED 2 4.12.2009 AGAIN ASKED THE ASSESSEE TO EXPLAIN THE VERIFICATIO N ON ACCOUNT OF BILLS REGARDING CERTAIN RETAIL WHOLESALE ITEMS. IN RESPON SE TO THE SAME, THE ASSESSEE FILED ITS REPLY STATING THAT SOMETIMES THE PARTIES WHO BUYING GOODS IN WHOLESALE ARE HAVING TOTAL TURNOVER LESS T HAN 10 LACS, SO THEY DO 4 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 NOT MAINTAIN BOOKS AND ACCORDINGLY THEY BUY GOODS I N CASH. AND ALSO ADMITTED THAT ASSESSEE IS DOING BOTH WHOLESALE AS W ELL AS RETAIL TRADE BUT THE QUANTUM OF RETAIL TRADE IS QUITE LESS AS COMPAR ED TO WHOLE TRADE. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND HELD THAT ASSESSEE HAS NOT MAINTAINED ITS STOCK REGISTER AND FAILED TO PRODUCE QUANTITY, QUALITY AND VALUE-WISE DETAILS OF THE OPE NING AND CLOSING STOCKS. ASSESSING OFFICER ALSO POINTED OUT THAT IN COLUMN 2 8(A) OF THE AUDIT REPORT, IT IS CLEARLY MENTIONED THAT AS EXPLAINED TO US BECAUSE OF THE NUMBER OF ITEMS INVOLVED IT IS NOT POSSIBLE TO MAIN TAIN STOCK RECORDS. ASSESSEE HAS ALSO NOT SUBMITTED OPENING STOCK AS ON 01.04.2006. COPY OF CLOSING STOCK AS VALUED AND CER TIFIED BY PARTNERS ON 31.03.2007 AND COPY OF STOCK STATEMENT GIVEN TO THE BANK FOR HYPOTHECATION FOR OBTAINING LOANS HAVE ALSO NOT BEE N PRODUCED BY THE ASSESSEE. THE ASSESSING OFFICER HAS POINTED OUT ALM OST FIFTEEN DEFICIENCIES IN THE ACCOUNTS OF THE ASSESSEE WHICH THE ASSESSING OFFICER HAS MENTIONED AT PAGES 3 TO 5 OF THE ASSESSMENT ORD ER AND LASTLY THE ASSESSING OFFICER HELD THAT IN THE ABSENCE OF STOCK REGISTER, FAILURE OF THE ASSESSEE TO PRODUCE THE OPENING STOCK DETAILS AND I NABILITY ON HIS PART TO TALLY/VERIFY THE CLOSING STOCK DETAILS FOR VALUATIO N PURPOSE WITH PURCHASE/SALE BILLS, FALL IN THE GROSS PROFIT RATE AS COMPARED TO THE 5 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 PREVIOUS YEAR AND LOW GROSS PROFIT RATE SHOWN AS CO MPARED TO SIMILAR CONCERN I.E. M/S BHATIA DEPARTMENTAL STORE, PHAGWAR A, HE WAS NOT SATISFIED ABOUT THE CORRECTNESS AND COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE. THUS, HE WAS LEFT WITH NO ALTERNATIVE BUT TO REJECT THE TRADING RESULTS OF THE ASSESSEE AS PER THE PROVISIONS OF SE CTION 145(3) OF THE I.T. ACT, 1961. CONSIDERING THE TOTALITY OF FACTS AND CI RCUMSTANCES OF THE CASE AS DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER, HE FOUND THAT IT IS FAIR AND REASONABLE TO COMPUTE THE GROSS PROFIT AT THE RATE OF 18% AND ACCORDINGLY, HE MADE AN ADDITION OF RS. 11, 34,648/ - TO THE TRADING RESULTS IN THE CASE OF THE ASSESSEE AND COMPLETED THE ASSES SMENT ON 24.12.2009 UNDER SECTION 143(3) OF THE ACT. 4) AGGRIEVED BY THE ASSESSMENT ORDER DATED 24.12.20 09, ASSESSEE FILED AN APPEAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY WHO VIDE IMPUGNED ORDER DATED 30.11.2012 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY REDUCING THE G.P. RATE TO 9% FROM 18% A S DETERMINED BY THE ASSESSING OFFICER AND GIVEN ALMOST 50% RELIEF TO TH E ASSESSEE ON THE BASIS OF INCREASE OF SALES IN THE BUSINESS OF ASSES SEE AND ON THE BASIS OF OTHER COMPARABLE BUSINESS. NOW, AGAIN AGGRIEVED BY THE ORDER OF LEARNED FIRST APPELLATE AUTHORITY, THE ASSESSEE FILED THE P RESENT APPEAL. 6 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 5) LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE REVENUE AUTHORITY HAS WRONGLY REJECTED THE BOOKS OF ACCOUNT IN SPITE OF THE FACT THAT THE ASSESSEE HAS PRODUCED COMPLETE BOOKS CONSI STING OF CASH BOOK, LEDGER, PURCHASE AND SALE VOUCHERS AS AND WHEN ASKE D BY THE REVENUE AUTHORITY. HE FURTHER STATED THAT THE BOOKS ARE DUL Y AUDIT BY A QUALIFIED CHARTERED ACCOUNTANT AND LEARNED CIT(A) HAS NOT POI NTED EVEN A SINGLE ITEM EITHER IN PURCHASES OR SALES FROM WHERE IT CAN BE PROVED THAT THESE ARE NOT CORRECTLY RECORDED. NO PARTICULAR EXPENDITU RE SHOWN IN THE ACCOUNT BOOKS HAS BEEN DISALLOWED BY THE ASSESSING OFFICER. IN FACT, NO DEFECT HAS BEEN POINTED OUT IN THE BOOKS OF ACCOUNT . HE FURTHER STATED THAT THE SAME SYSTEM OF ACCOUNTING HAS BEEN REGULARLY FO LLOWED BY THE ASSESSEE OVER THE YEARS. THERE IS NO CHANGE IN HIS SYSTEM OF ACCOUNTING AND ALSO THERE IS NO CHANGE IN THE METHOD OF VALUAT ION OF CLOSING STOCK. THE SAME METHOD IS BEING EMPLOYED TO VALUE STOCK AS WAS IN EARLIER YEARS. THE ONLY REASON FOR REJECTING THE BOOKS OF A CCOUNT IS NON- MAINTENANCE OF STOCK REGISTER AND FALL IN G.P. HE F URTHER STATED THAT THERE IS NO NEED TO MAINTAIN THE STOCK REGISTER BY THE AS SESSEE AND REJECTION OF BOOKS OF ACCOUNT ON THIS GROUND IS TOTALLY WRONG. I N SUPPORT OF HIS CONTENTION, HE HAS CITED THE DECISION OF HON'BLE PU NJAB AND HARYANA HIGH COURT IN THE CASE OF PANDIT BROTHERS VS. CIT (026 ITR 159). HE FINALLY 7 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 STATED THAT LEARNED FIRST APPELLATE AUTHORITY HAS A LSO WRONGLY ESTIMATED THE G.P. @ 9% WITHOUT ANY JUSTIFICATION AND WITHOUT CONSIDERING THE MATERIAL ON RECORD AND THE PAST HISTORY OF ASSESSEE . LASTLY, HE REQUESTED THAT THE TRADING RESULTS OF THE ASSESSEE MAY BE ACC EPTED BY ALLOWING THE APPEAL FILED BY THE ASSESSEE. 6) LEARNED D.R. RELIED UPON THE ORDER PASSED BY LEA RNED FIRST APPELLATE AUTHORITY AND STATED THAT THE ASSESSING O FFICER HAS POINTED OUT MANY DEFICIENCIES IN THE BOOKS OF ACCOUNT MAINTAINE D BY THE ASSESSEE WHICH ARE NOT VERIFIABLE AND THE ASSESSEE HAS ALSO NOT FILED ANY DOCUMENTARY EVIDENCE SUPPORTING ITS CLAIM. HE FINAL LY STATED THAT THE ASSESSEE HAS NOT MAINTAINED ANY STOCK REGISTER WHIC H IS VERY MUCH NECESSARY TO DETERMINE THE EXACT PROFIT IN THE BUSI NESS. THEREFORE, THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 7) WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORD AVAILABLE WITH US ESPECIALLY THE ORDER PASSED BY TH E REVENUE AUTHORITY AS WELL AS THE ARGUMENTS ADVANCED BY LEARNED COUNSEL F OR BOTH THE PARTIES. WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSING OF FICER HAS GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO FILE QUAN TITY, QUALITY AND VALUE- WISE DETAILS OF OPENING STOCK AND CLOSING STOCK. NE ITHER ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE HAS FILED THESE DETAILS B EFORE THE REVENUE 8 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 AUTHORITY. ASSESSEE HAS ALSO NOT PRODUCED STOCK STA TEMENT GIVEN TO THE BANK DULY CERTIFIED BY THE PARTNERS ON 31.03.2007 F OR HYPOTHECATION FOR OBTAINING LOANS. ASSESSING OFFICER HAS GIVEN A NOTI CE TO THE ASSESSEE AND ASKED TO SHOW-CAUSE THE REASON FOR FALLING OF G.P. RATE BY 1 % I.E. FROM 7% TO 6% AS COMPARED TO PREVIOUS YEAR AND ALSO COMP ARE TO THE OTHER SIMILAR CONCERN I.E. BHATIA DEPARTMENTAL STORE, PHA GWARA, HAVING THE SAME TRADE I.E. TRADING IN PLASTIC AND CROCKERY GOO DS ETC. WHICH WAS SHOWING G.P. @ 18% BUT THE ASSESSEE HAS NOT GIVEN A NY LOGIC TO THE QUERY OF THE ASSESSING OFFICER AND ONLY STATED THAT THE BOOKS OF ACCOUNT CANNOT BE REJECTED ON ACCOUNT OF LOW G.P. AND FOR N ON-MAINTENANCE OF STOCK REGISTER. 8) WE HAVE THOROUGHLY GONE THROUGH THE ORDER PASSED BY THE REVENUE AUTHORITY ESPECIALLY THE ASSESSMENT ORDER A ND FOUND THAT THE ASSESSING OFFICER HAS GIVEN FIFTEEN REASONS FOR REJ ECTING THE CONTENTION OF THE ASSESSEE WHICH ARE AT PAGES 3 TO 5 OF THE ASSES SMENT ORDER. FOR THE SAKE OF CONVENIENCE, THE SAME ARE REPRODUCED AS UND ER:- I. AS PER THE TRADING ACCOUNT THE ASSESSEE IS HAVING O PENING STOCK AT RS. 31,40,808/- AS ON 01.04.2006 AND CLOSING STOCK AT RS. 42,97,510/- AS ON 31.03.2007. II. NO STOCK REGISTER IS BEING MAINTAINED BY THE ASSESS EE. FURTHER, THE ASSESSEE HAS FAILED TO PRODUCE QUANTITY, QUALITY AN D VALUE-WISE DETAILS OF THE OPENING AND CLOSING STOCKS. IN COLUM N 28(A) OF THE AUDIT REPORT IT IS CLEARLY MENTIONED THAT AS EXPLAINED TO US 9 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 BECAUSE OF THE ITEMS INVOLVED IT IS NOT POSSIBLE TO MAINTAIN STOCK RECORDS. III. TILL DATE, NO OPENING STOCK DETAILS AS ON 01.04.200 6 HAVE BEEN SUBMITTED BY THE ASSESSEE. IV. COPY OF THE CLOSING STOCK AS VALUED AND CERTIFIED B Y PARTNERS ON 31.03.2007 AND ALSO COPY OF STOCK STATEMENT GIVEN T O THE BANK FOR HYPOTHECATION FOR OBTAINING LOANS HAS NOT BEEN PROD UCED BY THE ASSESSEE, SO FAR. V. EVEN THE CLOSING STOCK DETAILS FILED CANNOT BE VERI FIED/TALLIED WITH THE PURCHASE BILLS/SALE BILLS FOR THE PURPOSE OF VA LUATION AS NO QUALITY/DEMARCATION OF VARIOUS ITEMS IS THERE IN TH E CLOSING STOCK LIST SUBMITTED BY THE ASSESSEE. VI. THUS THE OPENING STOCK AND CLOSING STOCK DETAILS CA NNOT BE VERIFIED IN VIEW OF THE FACTS DETAILED ABOVE. VII. THE GROSS PROFIT RATE SHOWN BY THE ASSESSEE FOR A.Y . 2007-08 IS 6% AS COMPARED TO GROSS PROFIT RATE OF 7% SHOWN BY THE ASSESSEE FOR A.Y.S 2006-70 & 2005-06, THEREBY SHOWING DECREASE O F 1%. VIII. MOREOVER, ANOTHER CONCERNED M/S BHATIA DEPARTMENTAL STORE, PHAGWARA, WHICH IS ALSO CARRYING ON SIMILAR BUSINES S I.E. TRADING IN PLASTIC AND CROCKERY ITEMS ETC. IS SHOWING GROSS PROFIT RATE OF 18%. IX. ASSESSEES CONTENTION REGARDING BEING A WHOLESALER IS NOT CORRECT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE SAL E BILLS WERE EXAMINED IN DETAIL AND EVEN PHOTOCOPIES OF SOME OF THESE BILLS HAVE BEEN OBTAINED AND PLACED ON RECORD. FURTHER, A FTER EXAMINATION OF SALE BILLS (VAT AND OTHERS), IT HAS BEEN FOUND THAT THE ASSESSEE IS DOING BOTH RETAIL AND WHOLESALE BUS INESS. IT IS DIFFICULT TO QUANTIFY BETWEEN RETAIL AND WHOLESALE ITEMS SOLD AS MAJORITY OF BILLS ARE CASH INVOICES AND EVEN OTHERW ISE THE AMOUNT IS PETTY VARYING BETWEEN RS. 100 TO RS. 5,000/-, WH ICH IN NO WAY CAN BE TERMED AS WHOLESALE TRADE. X. EVEN THE EXAMINATION OF LEDGER ACCOUNT REVEALS THAT THE MAJORITY OF THE SALES OF THE ASSESSEE ARE CASH SALES RANGING BE TWEEN RS. 100/- TO RS. 5,000/- ONLY. XI. FURTHER, OUT OF TOTAL PURCHASE OF RS. 98.84 LACS, T HE SUNDRY CREDITORS ARE AT RS. 46.15 LACS AND OUT OF TOTAL SA LES OF RS. 94.55 LACS, THE SUNDRY DEBTORS ARE ONLY RS. 7.11 LACS. TH IS CLEARLY ESTABLISHES THAT THE ASSESSEE IS NOT A WHOLESALER B UT IS ALSO DOING RETAIL BUSINESS AS WELL. 10 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 XII. THE CASE OF BHATIA DEPARTMENTAL STORE WAS ALSO UNDE R SCRUTINY FOR A.Y. 2007-08 AND THE EXAMINATION OF THE SALE BILLS REVEALED THE SAME STATEMENT OF AFFAIRS I.E. IT IS ALSO DOING WHO LESALE AND RETAIL BUSINESS. XIII. IN VIEW OF THE FACTS DETAILED ABOVE THE ASSESSEES CONTENTION THAT HE IS A WHOLESALER AND THEREBY SHOWING LOW GROSS PROFI T RATE AS COMPARED TO SIMILAR CONCERN M/S BHATIA DEPARTMENTAL STORE, PHAGWARA, IS INCORRECT. XIV. FURTHER, THE FACTS OF THE CASE LAW CITED BY THE ASS ESSEE ARE TOTALLY DIFFERENT FORM THAT OF THE ASSESSEES CASE. XV. THUS THE TRADING RESULTS SHOWN BY THE ASSESSEE ARE NOT VERIFIABLE FROM THE ACCOUNTS MAINTAINED BY THE ASSESSEE AND HE NCE CORRECT INCOME CANNOT BE COMPUTED FROM THESE. 9) AT LAST, THE ASSESSING OFFICER HAS SAID THAT THE OFFICER IS GOING TO ACCEPT THE SYSTEM OF ACCOUNTING REGULARLY EMPLOY ED BY THE ASSESSEE. THE CORRECTNESS OF WHICH HAD NOT BEEN QUESTIONED IN THE PAST BUT THERE IS NO ESTOPPELS IN THESE MATTERS AND THE OFFICER IS NO T BOUND BY THE METHOD FOLLOWED IN THE EARLIER YEARS. SECTION 145 OF THE A CT CONFERS SUFFICIENT POWERS UPON THE OFFICER MAY IT IMPOSES A DUTY UPO N HIM TO MAKE SUCH COMPUTATION IN SUCH MANNER AS HE DETERMINES FO R DEDUCING THE CORRECT PROFITS AND GAINS. AND LASTLY, THE ASSESSIN G OFFICER HAS RIGHTLY HELD THAT IN THE ABSENCE OF STOCK REGISTER, FAILURE OF THE ASSESSEE TO PRODUCE THE OPENING STOCK DETAILS AND INABILITY ON HIS PART TO TALLY/VERIFY THE CLOSING STOCK DETAILS FOR VALUATION PURPOSE WIT H PURCHASE/SALE BILLS, FALL IN THE GROSS PROFIT RATE AS COMPARED TO THE PR EVIOUS YEAR AND LOW GROSS PROFIT RATE SHOWN AS COMPARED TO SIMILAR CONC ERN I.E. M/S BHATIA 11 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 DEPARTMENTAL STORE, PHAGWARA, HE WAS NOT SATISFIED ABOUT THE CORRECTNESS AND COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE. T HUS, HE WAS LEFT WITH NO ALTERNATIVE BUT TO REJECT THE TRADING RESULTS OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 145(3) OF THE ACT. CONSIDERIN G THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED IN DETAI L IN THE ASSESSMENT ORDER, HE FOUND THAT IT IS FAIR AND REASONABLE TO C OMPUTE THE GROSS PROFIT AT THE RATE OF 18% AND ACCORDINGLY, HE MADE AN ADDI TION OF RS. 11, 34,648/- TO THE TRADING RESULTS IN THE CASE OF THE ASSESSEE. 10) LEARNED FIRST APPELLATE AUTHORITY TAKING A LENIEN T VIEW AND KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS WELL AS THE PREVIOUS HISTORY OF THE ASSESSEES BUSINESS, HA S REDUCED THE G.P. TO 9% FOR YEAR UNDER CONSIDERATION. LEARNED FIRST APPE LLATE AUTHORITY HAS RIGHTLY APPRECIATED THE G.P. RATE WHICH HAS FALLEN IN THE PRESENT ASSESSMENT YEAR ON THE BASIS OF INCREASE IN SALES F ROM RS. 37,24,717/- IN A.Y. 2005-06 TO RS. 47,48,703/- IN A.Y. 2006-07 TO RS. 94,55,396/- IN A.Y. 2007-08 IS A FACTOR WHICH HAS TO BE WEIGHED WH ILE ESTIMATING THE G.P. FOR THIS YEAR AS INCREASE IN SALES MORE THAN 2 .5 TIMES DURING TWO YEARS HAD AN EFFECT OF SQUEEZING THE PROFITS. 11) LEARNED FIRST APPELLATE AUTHORITY HAS ALSO REDUCE D THE G.P. RATE FROM 18% TO 9% AND APPRECIATED THE OTHER COMPA RABLE BUSINESS 12 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 MENTIONED BY THE ASSESSING OFFICER I.E. M/S BHATIA DEPARTMENTAL STORE, PHAGWARA, AND STATED THAT M/S BHATIA DEPARTMENTAL S TORE, PHAGWARA, WAS PURELY A RETAIL OUTLET WHEREAS ASSESSEE IS MAJORLY A WHOLESALER, ALSO OPERATING AS RETAILER AT TIMES. WE APPRECIATE THE F INDINGS GIVEN BY LEARNED FIRST APPELLATE AUTHORITY ON THE ISSUE IN DISPUTE A ND FIND THAT LEARNED FIRST APPELLATE AUTHORITY HAS GIVEN SUFFICIENT RELI EF TO THE ASSESSEE BY REDUCING THE G.P. RATE FROM 18% TO 9% AND PASSED A DETAILED/REASONABLE ORDER AFTER CONSIDERING THE EVIDENCE PRODUCED BY TH E PARTIES. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY LEARNED FIRST APPELLATE AUTHORITY AND WE DO NOT FIND ANY FO RCE IN THE ARGUMENT ADVANCED BY THE LEARNED COUNSEL FOR THE ASSESSEE. A CCORDINGLY, WE REJECT THE SAME BY UPHOLDING THE ORDER PASSED BY LEARNED F IRST APPELLATE AUTHORITY AND DISMISS THE PRESENT APPEAL FILED BY T HE ASSESSEE. 12) IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JUNE, 2013 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH JUNE, 2013 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S CHOPRA AGENCIES, BACKSIDE OLD SA BJI MANDI, PHAGWARA. 13 I.T.A. NO. 105 (ASR)/2013 ASSESSM ENT YEAR: 2007-08 2. INCOME TAX OFFICER, WARD-I, PHAGWARA. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR 5. THE SR DR, I.T.A.T., AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.