Shri Babubhai Laljibhai Patel, Surat. V. The Dy.CIT-(HQ)-III, Surat.

ITA 2438/AHD/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9156 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 28-07-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 28-11-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K SAROHHASR
• Assessee Lawyers: ASWIN PAREKH
• Section: 143(3); 131; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI T.K. SHARMA, JUDICIAL MEMBER & SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER ITA NO. 2438/AHD/2005 ASSESSMENT YEAR: 2002-03 SHRI BAHUBHAI LALJIBHAI PATEL, VS DCIT(HQ)III OR AC IT-9/CIR.9 SURAT SURAT PAN NO./GIR NO. ADSPP6079K & ITA NO. 2582/AHD/2005 ASSESSMENT YEAR: 2002-03 ACIT, CIRCLE -9, VS SHRI BABUBHAI LALJIBHAI PATEL , SURAT SURAT (APPELLANT) (RESPONDENT) APPELLANT BY : SH ASWIN PAREKH, AR RESPONDENT BY : SH A.K. SAROHHA,SR DR ORDER PER T.K.SHARMA, J.M. THESE CROSS APPEALS ARE AGAINST THE ORDER DATED 20 .9.2005 OF CIT(A) VI, SURAT FOR THE ASSESSMENT YEAR 2002-03. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN ITS AP PEAL IS THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESS ING OFFICER IN INVOKING SECTION 145 OF THE INCOME TAX ACT IN THE ABSENCE O F ANY DEFECT IN THE BOOKS OF ACCOUNTS AND THEREBY CONFIRMING THE ADDITION OF RS. 8,30,000/- ON ACCOUNT OF UNDER PRODUCTION / SALES OUTSIDE THE BOOKS OF AC COUNT / UNACCOUNTED PRODUCTION FOR THE ASSESSMENT YEAR 2002-03. 2 3. THE VARIOUS GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER:- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE HEARD CIT(A) HAS ERRED IN REDUCING THE ESTIMATION O F ADDITION ON ACCOUNT OF SUPPRESSION OF PRODUCTION AN D SALES OUTSIDE THE BOOKS OF ACCOUNTS FROM 15% OF THE TOTAL PRODUCTION TO 7.5%. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD CIT(A) HAS ERRED IN HOLDING THAT ADDITION ON AC COUNT OF 7.5% OF THE TOTAL PRODUCTION IS SUFFICIENT TO COVER THE SUPPRESSION OF PRODUCTION AND SALE OUT SIDE THE BOO KS OF ACCOUNT, WITHOUT GIVING ANY REASON DESPITE HOLDING THAT THE BOOKS OF ACCOUNTS ARE COOKED UP. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 4,67,528/- MADE U/S 40A(2)(B) BEING THE EXCESS JOB WORK CHARGES MADE TO ITS SISTER CONCERN FOR JOB WORK C HARGES. 4. THE BRIEF FACTS RELATING TO CONTROVERSY INVOLVED IN THE ONLY GROUND OF APPEAL OF THE ASSESSEE AND GROUNDS NOS 1 & 2 OF REV ENUE IS THAT ON VERIFICATION OF DETAILS AND BOOKS OF ACCOUNT, ASSES SING OFFICER NOTICED THAT ASSESSEE HAD PRODUCED 5,18,256 METERS OF GREY CLOTH ON THE CONSUMPTION OF 51697.980 KGS OF YARN. ON FURTHER EXAMINATION OF B OOKS OF ACCOUNT AND DETAILS SUBMITTED DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, THE ASSESSING OFFICER , AFTER NOTICING THE VARIOUS GLAR ING DEFECTS LISTED BELOW HAD COME TO THE CONCLUSION THAT BOOKS OF ACCOUNT OF THE ASSESSEE WERE COOKED UP. I) THE ASSESSEE HAD SHOWN THE PRODUCTION OF GREY CL OTH OF ONE METER PER KG OF YARN AT CONSTANT RATIO AT 10.02 5 FOR EACH AND EVERY MOTH FROM APRIL TO MARCH (TABLE NO.1 GIVEN ON PAGE 2 OF THE ORDER UNDER SECTION 143(3) M AY KINDLY BE REFERRED TO). II) THE ASSESSEE DID NOT MAINTAIN THE REGISTER OF I SSUE OF YARN TO EACH WORKER ON EACH MACHINE OF DAY-TO-DAY BASIS. IN ABSENCE OF THIS, THE FIGURES OF CONSUMPT ION OF 3 YARN CLAIMED BY THE ASSESSEE REMAINED UNVERIFIABLE. IN THIS CONTEXT, THE ASSESSING OFFICER HAD ALSO RECORD ED THE STATEMENT OF THE ASSESSEE UNDER SECTION 131 OF THE I.T. ACT. IN THE STATEMENT, THE ASSESSEE HAD CATEGORICA LLY ADMITTED THAT NO DAY-T-DAY RECORD IN TERMS OF QUALI TY REGARDING CONSUMPTION OF YARN AND MANUFACTURE OF GR EY CLOTH WAS MAINTAINED. III) ON CONDUCTING ENQUIRIES, THE ASSESSING OFFICER GATHERED THAT TWO SALES PARTIES HAD DENIED HAVING PURCHASED CLOTH FROM THE ASSESSEE. THIS WOULD MEAN THAT THE S ALES WERE UNVERIFIABLE. IV) THE ASSESSEE HAD FAILED TO EXPLAIN HOW A CONSTA NT ONE QUALITY OF GREY CLOTH WAS PRODUCED BY HIM THOUGH AT LEAST 10 DIFFERENT TYPES OF YARNS WERE PURCHASED AND CONSUMED BY THE ASSESSEE. THE ASSESSING OFFICER ACCORDINGLY REJECTED THE BOOK S OF ACCOUNT AND ESTIMATED 15% OF GROSS PROFIT, PRODUCTION OUT OF BO OKS OF ACCOUNT AND SOLD WITHOUT RECORDING THEM IN THE BOOKS OF ACCOUNT. HE MADE AN ADDITION OF RS.16,71,368/-. 5. BEFORE THE LEARNED CIT(A), IT WAS CONTENDED THAT MANTRA (MAN MADE TEXTILES RESEARCH ASSOCIATION, MINISTRY OF TEXTILE (GOVT. OF INDIA) WHERE REPORTS ARE ANALYZED IN THE PAPER BOOK FILED BY THE PARTIES, RECORD IS NOT RELIABLE. REGARDING ELECTRICITY CONSUMPTION, IT WA S CONTENDED THAT THERE ARE MINOR DIFFERENCE. WITH REGARD TO THE CLOSING STOCK , IT WAS STATED THAT A YARN WAS GIVEN IN KGS AND CLOSING OF GREY CLOTH WAS GIVE N IN METERS. THESE TWO ARE NOT COMPARABLE. THE ASSESSING OFFICER DID NOT ACCEP T THE ABOVE OBJECTION AND POINTED OUT THAT REPRESENTATIVE OF THE ASSESSEE SHRI BHUTWALA WAS SHOWN THE COMPLETE RECORD AND HE HAS CERTIFIED THAT PHOTO COPY OF THE RECORD GIVEN WAS TRUE COPY. THEREFORE, THE CONTENTION OF THE ASS ESSEE THAT COMPLETE RECORD 4 WAS NOT GIVEN IS NOT CORRECT. THE ASSESSING OFFICER ALSO STATED THAT HE DID NOT FURNISH THE SAMPLE CLOTH FOR VERIFICATION. APART FROM THIS DESPITE SEVERAL OPPORTUNITIES THE ASSESSEE WAS NOT ABLE TO EXPLAIN AS TO WHAT THE ASSESSEE DID WITH THE 10 DIFFERENT QUANTITIES OF YARN PURCHA SED DURING THE YEAR WHEN ONLY 50 DENIER AND 75 DENIER OF YARN WERE USED FOR THE MANUFACTURING OF CLOTH AND CLOTH MANUFACTURED THROUGH OUT THE YEAR WAS OF ONLY ONE QUALITY. THE ASSESSING OFFICER STATED THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW THAT THE TWO QUALITIES OF YARN VIZ 50 AND 75 DENIER WAS PURC HASED IN SUFFICIENT QUANTITY TO PRODUCE THE ENTIRE PRODUCTION OF CLOTH DURING TH E WHOLE YEAR. THEREFORE, THE ASSESSEE IS NOT ABLE TO ACCOUNT FOR AS TO HOW THE P RODUCTION OF SAME QUALITY OF CLOTH DURING THE WHOLE YEAR WAS MADE AND WHY THE OTHER QUALITY OF YARN WERE PURCHASED. ALSO, BEFORE THE LEARNED CIT(A), REGARDING REJECTION OF BOOKS OF ACCOUNT, IT WAS STATED THAT BOOKS OF ACCOU NT HAVE BEEN MAINTAINED REGULARLY. THESE ARE AUDITED U/S 44AB OF THE ACT AN D THE RELEVANT AUDIT REPORT VIDE FORM NO. 3CB AND 3CD WAS FURNISHED ALONGWITH T HE RETURN OF INCOME. THE LEARNED CIT(A) CALLED UPON FOR REMAND REPORT AS KING THE ASSESSING OFFICER TO GIVE THE REASONS AND BASED FOR ADOPTING 15% OF PRODUCTION OUTSIDE THE BOOKS OF ACCOUNT. HE WAS ALSO ASKED TO INDICAT E HOW THE FIGURE OF 15% WAS ARRIVED AT. AFTER CONSIDERING THE VARIOUS SUBM ISSIONS IN THE IMPUGNED ORDER, LEARNED CIT(A) UPHELD THE ACTION OF THE ASSE SSING OFFICER WITH REGARD TO THE REJECTION OF BOOKS OF ACCOUNT. HOWEVER, HE POI NTED OUT THAT NEITHER IN ASSESSMENT ORDER NOR IN THE REMAND REPORT ASSESSING OFFICER HAS GIVEN ANY WORKING AS TO HOW THE FIGURE OF 15% WAS ADOPTED. B EFORE THE LEARNED CIT(A), THE ASSESSEE HAS ARGUED THAT IN THE CURRENT YEAR 6. 61% OF GP RATE AND 2.15% OF N.P. RATE ARE MUCH HIGHER THAN THE GP RATE OF 3. 88% AND N.P RATE OF 1.36% FOR ASSESSMENT YEAR 2001-02 AND G.P. RATE OF 2.93% AND N.P. RATE OF 0.63% 5 FOR ASSESSMENT YEAR 2000-01. AFTER CONSIDERING TH ESE FACTS, LEARNED CIT(A) OBSERVED THAT IT IS DIFFICULT TO QUANTIFY THE EXACT AND SPECIFIC UNDERPRODUCTION / SALES OUTSIDE THE BOOKS. LEARNED CIT(A) ACCORDING LY INSTEAD OF 15% ESTIMATE OF UNDERPRODUCTION / SALES AND PURCHASE OU TSIDE THE BOOKS ESTIMATED THE SAME AT 7.5%. HE ACCORDINGLY RESTRIC TED THE ADDITION TO 50% TO RS. 8,30,000/- AGAINST RS. 16,61,368/- MADE BY THE ASSESSING OFFICER. 6. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), BO TH SIDES ARE IN APPEAL BEFORE US. AT THE TIME OF HEARING, SHRI A.K. SAROH A, SR DR APPEARED FOR THE REVENUE POINTED OUT THAT HAVING ACCEPTED THE CONTEN TION THAT BOOKS OF ACCOUNT WERE RIGHTLY REJECTED BY THE ASSESSING OFFI CER, LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ACTION OF ASSESSING OFFICER IN E STIMATING THE PRODUCTION OUTSIDE THE BOOKS OF ACCOUNT AT 15% . 7. AS AGAINST THIS ORDER, THE LEARNED AR OF THE ASS ESSEE SUBMITTED THAT ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNT WH ICH ARE DULY AUDITED U/S 44AB OF THE INCOME TAX ACT, THE SALE AND PURCHASE ARE FULLY VOUCHED, THE MANUFACTURING PROCESS IS UNDER THE CONTROL OF CENTR AL EXCISE DEPARTMENT AND, THEREFORE, THERE IS NO CASE FOR REJECTION OF BOOKS OF ACCOUNT. ON QUANTUM ADDITION, LEARNED AR SUBMITTED THAT ASSESSEE HAS SH OWN HIGHER GROSS PROFIT RATE AND HIGHER NET PROFIT RATE AS COMPARED TO PREV IOUS YEAR, THEREFORE, THERE IS NOT CASE FOR MAKING ANY ADDITION EVEN THOUGH THE ASSESSING OFFICER MAY NOT RELY ON THE BOOKS OF ACCOUNT. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN OUR CONSIDERED VIEW, TH E UNDOUBTED FACTS ARE THAT 6 THE ASSESSEE IS PRODUCING CLOTH FROM YARN AND THERE IS NO DIRECT CO- RELATIONSHIP OF THE YARN USED AND THE CLOTH MANUFAC TURED. YARN IS PURCHASED IN TERMS OF WEIGHT WHEREAS THE CLOTH IS MANUFACTURE D IN TERMS OF METERS. NO STANDARDS OF INPUT OR OUTPUT RATIO HAS BEEN SUBMIT TED BY THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER POINTED OUT THAT ASS ESSEE IS SHOWING EXACTLY UNIFORM RATE OF YIELD IN ALL THE MONTHS WHICH IS NO T NATURAL. THEREFORE, THE BOOKS OF ACCOUNT OF THE ASSESSEE CANNOT BE RELIED. THE ASSESSING OFFICER WAS, THEREFORE, JUSTIFIED AND SO THE COMMISSIONER ( APPEALS) IN REJECTING THE BOOKS BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. HOWEVER, WE NOTICED THAT INSPITE OF ALLEGED LOW YIELD, THE REVE NUE HAS NOT POINTED OUT AS TO WHY ONLY 15% BE TREATED AS UNDER PRODUCTION AND ACC ORDINGLY SALES OUTSIDE THE BOOKS. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT ASSESSEE HAS SOLD ANY PRODUCTION OUTSIDE THE BOOKS. THE ASSESSING OF FICER ALSO COULD NOT POINT OUT ANY DISCREPANCY IN THE EXCISE RECORD MAINTAINED BY THE ASSESSEE. EVEN OTHERWISE, IT IS NOTICED THAT THE GROSS PROFIT RATE AND NET PROFIT RATE THIS YEAR IS HIGHER AS COMPARED TO THE IMMEDIATE PRECEDING YEAR. THEREFORE, NO CASE IS MADE OUT FOR ANY ADDITION EVEN ON THE BASIS OF GROS S PROFIT / NET PROFIT RATE. IN ANY CASE, WHERE BOOKS OF ACCOUNT ARE REJECTED, THE ONLY OPTION AVAILABLE TO THE ASSESSING OFFICER IS TO ESTIMATE THE PROFIT AND FOR THIS HE IS REQUIRED TO ADOPT A REASONABLE BASIS. IF THERE IS NO BASIS FOR ESTIMATING THE PROFIT, THEN SUCH ESTIMATE IS UNLIKELY TO BE SUSTAINED. IN THE P RESENT CASE, THE ASSESSING OFFICER AS ALSO THE LEARNED CIT(A) IS ARBITRARILY DETERMINING UNDER PRODUCTION BY 15% OR 7.5% RESPECTIVELY FOR WHICH THEY HAVE NOT SPELT OUT ANY BASIS. THEREFORE, IN THE LIGHT OF ASSESSEE DECLARING HIGH ER GROSS PROFIT RATE / HIGHER NET PROFIT RATE, SUCH ARBITRARY ESTIMATE CANNOT BE UPHELD, THEREFORE, ADDITION SUSTAINED BY THE LEARNED CIT(A) IS DELETED. 7 9. WITH REGARD TO THE GROUND NO. 3 OF REVENUES APP EAL, THE LEARNED DR RELIED ON THE REASONING GIVEN BY THE ASSESSING OFFI CER AND CONTENDED THAT ASSESSEE IS PAYING TO THE SISTER CONCERN JOB CHARGE S AT THE RATE OF RS. 5 PER METER WHEREAS THE ASSESSEE IS INCURRING ONLY RS. 3. 79 PER METER FOR SELF MANUFACTURED CLOTH. THE ASSESSING OFFICER RIGHTLY A DDED DIFFERENCE OF RATE OF RS.1.21 PER METER U/S 40A(2)(B) OF THE INCOME TAX A CT, 1961 ON THE PRODUCTION OF 386387 METERS OF CLOTH MANUFACTURED O N THE JOB WORK BASIS. THE LEARNED CIT(A) DELETED THE SAME BY FOLLOWING THE TR IBUNAL ORDER. HE SUBMITTED THAT SINCE THE PAYMENT WAS HIT BY PROVISI ONS OF SECTION 40A(2)(B), THE DISALLOWANCE MADE BY ASSESSING OFFICER BE REST ORED. ON THE OTHER HAND, SHRI ASWIN PAREKH, LEARNED COUNSEL APPEARED FOR THE ASSESSEE CONTENDED THAT THE ISSUE IS COVERED BY THE DECISION OF ITAT I N THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 WHEREIN THE TRIBUNA L VIDE ORDER DATED 20.12.2004 IN THE ASSESSMENT YEAR 2001-02 DELETED T HE ADDITION MADE BY DISALLOWING THE LABORER PAYMENT AT RS. 1 PER METER. IT WAS ALSO SUBMITTED THAT ASSESSING OFFICER HAS NOT POINTED OUT ANY COMPARABL E CASES. 10. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. IN THE IMPUGNED O RDER, LEARNED CIT(A) HAS STATED THAT IN THE ASSESSMENT YEAR 2001-02, ASSESSE E PAID RS. 6 PER METER TO SISTER CONCERN FOR JOB WORK AND ASSESSING OFFICE R ALLOWED THE PAYMENT OF RS. 5 PER METER WHICH WAS CONFIRMED BY THE CIT(A) I N HER ORDER DT. 18.4.2004. IN THE ASSESSMENT YEAR 2001-02, DISALLO WANCE OF RS. 1 PER METER 8 WAS MADE OVER AND ABOVE RS. 5 PER METER ALLOWED BY THE ASSESSING OFFICER, WHICH WAS ALSO DELETED IN THE ASSESSMENT YEAR 2001- 02. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW, THAT IN THE IMPUGNED ORDER, THE LEARNED CIT(A) HAS GIVEN COGEN T REASON FOR DELETING THE DISALLOWANCE OF RS. 4,67,528/-. WE THEREFORE, DECL INE TO INTERFERE. THIS GROUND OF THE APPEAL IS REJECTED. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THAT OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4.9.2009 SD/- SD/- (D.C.AGRAWAL) (T.K.SHARMA) ACCOUNTNT MEMBER JUDICIAL MEMBER DATED: 4 TH SEPT 2009 RKK COPY FORWARDED TO :- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A). 4. THE CIT 5. DR 6. GUARD FILE BY ORDER TRUE COPY DY./ASSTT. REGISTRAR, ITAT, AHMEDABAD. 9 AGAINST THE ORDER, THE LEARNED AR OF THE ASSESSEE S UBMITTED THAT ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNT ON THE SALE AND PURCHASE AND VOUCHED THE MANUFACTURING PROCESS UNDER THE CONTROL OF CENTRAL EXCISE DEPARTMENT AND, THEREFORE, THERE IS NO CASE FOR REJ ECTION OF BOOKS OF ACCOUNT. ON QUANTUM ADDITION, LEARNED AR SUBMITTED THAT ASS ESSEE HAS SHOWN HIGHER GROSS PROFIT RATE AND HIGHER NET PROFIT RATE AS COM PARED TO PREVIOUS YEAR, THEREFORE, THERE IS NOT CASE FOR MAKING ANY ADDITI ON EVEN THOUGH THE ASSESSING OFFICER MADE NO RELY ON THE BOOKS OF ACCO UNT. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN OUR CONSIDERED VIEW, THE UNDOUBTED F ACTS ARE THAT THE ASSESSEE IS PRODUCING CLOTH FROM YARN AND THERE IS NO DIRECT CO- RELATIONSHIP OF THE YARN USED AND THE CLOTH MANUFACTURED. YARN IS PURCHASED IN TERMS OF WEIGHT WHEREAS THE CLOTH IS MANUFACTURED IN TERMS OF METER S. NO STANDARDS OF INPUT OR OUTPUT RATIO HAS BEEN SUBMITTED BY THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER POINTED OUT THAT ASSESSEE IS SHOWING EXACTL Y UNIFORM RATE OF YIELD IN ALL THE MONTHS WHICH HAS NO RATIONALE. THEREFORE, THE BOOKS OF ACCOUNT OF THE ASSESSEE CANNOT BE RELIED. THE ASSESSING OFFICER W AS, THEREFORE, JUSTIFIED AND SO THE COMMISSIONER (APPEALS) IN REJECTING THE BOOKS BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. HOWEVER, WE NOTICED THAT INSPITE OF ALLEGED LOW YIELD, THE REVENUE HAS NOT POINTED OUT AS TO WHY ONLY 15% BE TREATED AS UNDER PRODUCTION AND ACCORDINGLY SALES O UTSIDE THE BOOKS. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT ASSESSEE HAS SOLD ANY PRODUCTION 10 OUTSIDE THE BOOKS. THEREFORE, THE ASSESSING OFFICE R ALSO COULD NOT POINT OUT ANY DISCREPANCY IN THE EXCISE RECORD MAINTAINED BY THE ASSESSEE. EVEN OTHERWISE, IT IS NOTICED THAT THE GROSS PROFIT RATE AND NET PROFIT RATE THIS YEAR IS HIGHER AS COMPARED TO THE IMMEDIATE PRECEDING YEAR. THEREFORE, NO CASE IS MADE OUT FOR ANY ADDITION EVEN ON THE BASIS OF GROS S PROFIT / NET PROFIT RATE. IN ANY CASE, WHERE BOOKS OF ACCOUNT ARE REJECTED, THE ONLY OPTION AVAILABLE TO THE ASSESSING OFFICER IS TO ESTIMATE THE PROFIT AND FOR THIS HE IS REQUIRED TO ADOPT A REASONABLE BASIS. IF THERE IS NO BASIS FOR ESTIMATING THE PROFIT, THEN SUCH ESTIMATE IS UNLIKELY TO BE SUSTAINED. IN THE P RESENT CASE, THE ASSESSING OFFICER AS ALSO THE LEARNED CIT(A) IS ARBITRARILY DETERMINING UNDER PRODUCTION BY 15% OR 7.5% RESPECTIVELY FOR WHICH THEY HAVE NOT SPELT OUT ANY BASIS. THEREFORE, IN THE LIGHT OF ASSESSEE DECLARING HIGH ER GROSS PROFIT RATE / HIGHER NET PROFIT RATE, SUCH ARBITRARY ESTIMATE CANNOT BE UPHELD, THEREFORE, ADDITION SUSTAINED BY THE LEARNED CIT(A) IS DELETED.