Royal Sales & Co., Surat V. Income Tax Officer, Ward - 1(3)(1), Surat

ITA 559/SRT/2023

AI Insights

Royal Sales & Co., a partnership firm engaged in the trading of sarees, grey, and fabrics, appealed against the order of the Commissioner of Income Tax (Appeals) which confirmed the rejection of their books of accounts and the addition of estimated profit. The Assessing Officer had initially rejected the books of accounts under section 145(3) of the Income Tax Act, 1961, citing non-maintenance of a day-to-day stock register and other discrepancies. The Tribunal, after examining the submissions and evidence provided by the assessee, including audited financial statements and confirmations from various parties, found no specific defects in the books of accounts and noted that the assessee had complied with all requirements during the scrutiny assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301500 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-10-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 10-08-2023
• Other Referred Cases: Jaytick Intermediates (P.) Ltd vs. State, Paramount Impex vs. State, Smt. Poonam Rani vs. State
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Rejection of books of accounts; Principle of natural justice; Question of law
• Section: 145; 143(3); 142(1); 133(6); 195; 143(2); 73; 13; 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT (SMC) BENCH BEFORE SHRI DR. A. L. SAINI, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.559/SRT/2023 Assessment Year: (2015-16) (Physical Hearing) Royal Sales & Co., 504, Arihant Park, Parle Point, Surat–395007 Vs. Income Tax Officer, Ward- 1(3)(1), Surat, Aaykar Bhawan, Near Majura Gate, Opp. New Civil Hospital, Surat-395001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAOFR2757F (Appellant) (Respondent) Appellant by Shri Mehul Shah, CA Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 18/10/2023 Date of Pronouncement 23/10/2023 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2015-16, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), [in short “the ld. CIT(A)”], National Faceless Appeal Centre (in short ‘the NFAC’), Delhi, dated 26.06.2023, which in turn arises out of an assessment order passed by Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 20.12.2017. 2. The grounds of appeal raised by the assessee are as follows: “1. On the facts and in circumstances of the case as well as law on the subject, the learned Assessing officer has erred serving the notice u/s 143(2) by way of Affixture, which is not a valid method of delivery of notice. 2. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Page | 2 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. Assessing officer of rejecting the books of accounts under section 145(3) of the Income Tax Act, 1961. 3. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing officer of making addition of Rs. 28,78,110/- on the account of estimated profit. 4. It is therefore prayed that above addition made by the assessing officer and confirmed by CIT(A) may please be deleted . 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 3. Brief facts of the issue in dispute are stated as under. The assessee before us is a partnership firm and filed its return of income for the assessment year (A.Y.) 2015-16, on 30.09.2015, showing total income of Rs.18,900/-. The assessee`s case was selected for scrutiny under CASS. Notice under section 143(2) of the Income Tax Act, dated 16.08.2016, was duly served by way of affixture at the Address; 504, Arihant Park, Parle Point, Surat. Further, a notice u/s 142(1) of the Act was issued to the assessee on 13.06.2017 and other dates. In response to the above notices, the assessee attended and submitted details and documents, as required by the assessing officer. During the year under consideration, the Assessee is engaged in the business of trading of sarees, grey and fabrics. The case of the assessee was selected for the purpose of complete scrutiny to verify the reason of low profit before Interest and Tax (PBIT) shown by the assessee. 4. In order to verify the details submitted by the assessee, notices u/s 133(6) of the Act were issued to the eight concerned parties i.e., Sale Parties and Purchase Parties, out of which two notices were returned unserved and six notices were served. The ledger of the Sale/Purchase parties received in response to notice u/s 133(6) of the Page | 3 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. Act from six parties and ledger of the Sale/Purchase parties provided by the assessee were reconciled by the Assessing Officer. After considering the facts of the case, the assessee was issued a show-cause notice by the Assessing Officer, on 13.12.2017, the relevant portion of which is reproduced as under: “In connection with the assessment proceedings for the A.Y. 2015-16, it is stated that your case has been selected for complete scrutiny. On verification of submission filed by you on 23.11.2017 and after reconciling the information received u/s.133(6) of the Act during the course of assessment proceedings, the following defects were noticed; 1. For the year under consideration you have shown Sales of Rs.5,78,23,086.60/- and has shown Gross Profit of Rs. 2,60,952/- (i.e. 0.45% of Sales). To verify abnormal low profit notices u/s 133(6) of the Act were issued, On perusal of the records it is noticed that no reply from M/s. Shrinatkji Engineering, M/s. Santoshi Berrier Film India Pvt. Ltd, Febteck Manufacturing Pvt. Ltd., and Radha Madhav Corporation Ltd, were received despite valid service of notice u/s.133(6) of the Act. It was further seen that in case of Sunshine Enterprise and Tinipati Flexopack Industries notices were returned unserved. 2. On perusal of your Trading Account, it is noticed that no Direct Expenses or Transport Expenses has been incurred by you. You could not furnish any evidence such as communications made with Sale Parties or Purchase Parties for making direct dispatch of goods to purchase parties from seller. 3. It is noticed you could not submit qualitative and quantitative details of stock which was maintained during the year under consideration. In view of above mentioned facts and notices issued on 13.06.2017, 23.08.2017, 08.09.2017, 20.10.2017, 18.10.2017, 10.11.2017 and 20.11.2017 and non- compliance made by you, you are requested to show-cause as to why books of accounts should not be rejected as they are not depicting complete and correct picture of accounts and profit at the rate of 5% of total turnover of Rs.5,78,23,086.60/- should not be estimated. Your reply to this show cause notice should reach this office on or before 20.12.2017, failing which it shall be presumed that you have nothing to say and the case will be finalized on merits and material on records. Your timely compliance will be highly appreciated.” 5. The assessee in its reply to the above show-cause notice, submitted details and documents. The reply of the assessee is reproduced as under: Page | 4 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. “For verification, the abnormal low profits the ld. AO had issued notices u/s 133(6). As per the notice, we believe that you have not received any of the replies. But on verification with that parties we found out that all the parties have duly replied to the notices received. On request they have shared with us all the replies filed with you. We would like to submit the scan copies of the reply letters already sent to you from the following parties; (Annexure-1)  Radha Madhav Corporation  M/s Tirupati Flexopack Industries Further the reply letters from the following parties have been posted to you from the registered post for which we are attaching the Receipt of the same herewith:  M/s Fabtech Manufacturing Ltd. Ltd.  M/s Shrinathji Engineering  M/s Sunsshine Enterprise 2. We are engaged in trading business and the transportation expenses borne by the parties which is included in the Sale Value. The Ledger of transportation Expense was provided earlier which clearly shows the same. Again we are attaching the Expense Ledger herewith. (Annexure-2) 3. As regarding the quantitative detail of stock required by you, we would like to clarify that the firm is involved in the activity of purchase and sale i.e. trading business. There is no stock maintained by the same and also there is no closing stock appearing in the Balance Sheet as on 31.03.2015. Still we are attaching the Quantitative details of stock inwards and outwards herewith along with the material wise bifurcation (Annexure - 3)” 6. However, the Assessing Officer rejected the contention of the assessee and observed that assessee has failed to produce details of stock register. Besides, the transportation cost was to be borne by the seller, the assessee could not furnish any agreement/supporting evidence, such as email or letter stating the same. The excess amount/advance received by the assessee- firm is not justified. Considering the above facts, the assessee`s books of accounts were rejected by the Assessing Officer and estimated @ 5% of the Sales Turnover of Rs.5,75,62,137/- which comes to Rs.28,78,106/-. This estimation is over and above the taxable profit shown by the assessee as per audited profit and loss account. Page | 5 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. 7. Aggrieved by the order of Assessing Office, the assessee carried the matter in appeal before the ld. CIT(A), who has confirmed the action of Assessing Officer. The ld. CIT(A) held that books of account of the assessee did not render the true and correct picture, therefore Assessing Officer has rightly rejected the books of accounts under section 143(3) of the Act. Aggrieved by the order of ld. CIT(A), the assessee is in further appeal before this Tribunal. 8. Shri Mehul Shah, Learned Counsel for the assessee, pleaded that Assessing Officer has rejected books of accounts without pointing out any error in the books of accounts. The assessee-firm submitted entire audited books of accounts, stock register, bills and vouchers etc., before the Assessing Officer. To reject the books of accounts, the Assessing Officer compared the earlier year profit with current year profit and find some mismatch and then based on such mismatch, rejected the books of accounts, which is not tenable. It is not necessary in the business that assessee should earn the same profit in current year, as he earned in the previous year. Another reason to reject the books of accounts by Assessing Officer was that assessee did not maintain daily quantitative details/stock. In this regard, ld Counsel submitted that assessee is in the business of trading activities, that is, he is purchasing goods and selling goods, therefore day to day quantitative stock register is not possible to maintain but the assessee has submitted monthly quantitative stock register and yearly quantitative stock register, which are sufficient to meet the requirement of the Assessing Officer, so far quantitative stock maintenance is concerned. Page | 6 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. 9. The ld Counsel further pointed out that for assessment year 2013-14, the accounts of the assessee were subject to audit and subject to scrutiny assessment and in scrutiny assessment, the books of accounts were not rejected and whatever gross profit declared by the assessee in A.Y 2013-14, has been accepted by the Assessing Officer. Therefore, considering the past trend, the books of accounts of the assessee, for the current assessment year, should not be rejected. 10. The ld Counsel also argued that the assessee has submitted its written submission before ld CIT(A), which were not considered by the ld. CIT(A) in his order, therefore order passed by ld CIT(A) is without considering assessee`s submission hence it is against the principle of natural justice (vide paper book page no.81). The Ld. Counsel, also took me through the paper book page no.30 and stated that assessee submitted the confirmations of debtors and creditors. The assessee also submitted the books of account, bills, vouchers and invoices etc. The Assessing Officer has pointed out that the assessee has not submitted the detail of transportation expenses. In this regard, ld Counsel argued that assessee has not incurred any transportation expenses while selling goods. The purchasers take the responsibility to bear transportation expenses and the assessee is not giving door to door delivery of his trading goods, therefore, there is no occasion to submit the details of transportation expenses. Apart from this, the assessee has not debited any transportation expenses in his profit and loss account, therefore it is not possible to submit any detail or documents before the Assessing Officer in respect of transportation expenses, When the assessee has not claimed any expenses in respect of transportation charges, in its profit and loss account, then in that circumstances, the assessing officer should not ask the assessee to Page | 7 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. submit the details of transportation expenses, as the assessee cannot compel to do the impossible thing. Based on these facts and circumstances, the Learned Counsel contended that the books of accounts of the assessee should not be rejected and audited books of accounts and the taxable profit shown by the assessee as per audited profit and loss account should be accepted. 11. On the other hand, Learned Senior Departmental Representative (ld. Sr. DR) for the Revenue submitted that assessee has not submitted day to day stock register, and quantitative tally, which is the moot point to reject the books of accounts of the assessee. In trading business, where the assessee does daily purchases and sales, the maintenance of day-to-day stock register is essential. The Assessing Officer has also compared the earlier year results and earlier year submissions of the assessee and then finds some mismatch between the books of account of the current year and earlier year, and that is why, the Assessing Officer rejected the books of accounts, therefore rejection of books of accounts by the Assessing Officer, may be upheld. 12. In rebuttal, Ld. Counsel submitted that no doubt the Assessing Officer has power to reject the books of accounts, but such power should be exercised in a judicious manner, as the assessee`s books of accounts were audited by Chartered Accountant and the Assessing Officer did not find any specific defects in the books of accounts, hence rejection of books of accounts are not in accordance with law. 13. I have heard both the sides and gone through the relevant material on record. It is seen that during the assessment proceedings, the Assessing Officer issued notice u/s 142(1) of the Act, which is Page | 8 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. placed at page nos.2 to 3 of paper book. In response to the notice u/s 142(1) of the Act, the assessee submitted its reply along with documentary evidences, which is placed at page no.1 of the paper book. The Assessing Officer again issued notice u/s 142(1) of the Act, which is placed at page no.6 to 8 of the paper book. In response to said notice, the assessee submitted its reply along with documentary evidences and details, (vide letter dated 06.11.2017 which is placed at page nos.4 to 5 of the paper book). The Assessing Officer issued again third time, the notice u/s 142(1) dated 13.12.2017, which is placed at page nos.14 to 15 of paper book. In response to the said notice, the assessee submitted relevant documents and explanations through its reply, which is placed at page nos.16 to 17 of the paper book. The assessee also submitted reply to the Assessing Officer on 22.11.2017 and 01.12.2017. While submitting the reply to the Assessing Officer, the assessee has submitted the relevant documents and evidences, as asked by the Assessing Officer, such as, books of account, bills, vouchers, stock register, quantitative tally of stock register on yearly basis and other documents required by the Assessing Officer. The books of accounts of the assessee were audited by Chartered Accountant and assessee submitted the entire set of books of accounts, including balance sheet, profit and loss account, schedules to the profit and loss account, ledger account of various parties, confirmations, and other evidences as asked by the Assessing Officer from time to time. The assessee also submitted the confirmation of the debtors and creditors, hence there was no failure on the part of the assessee in submitting documents and evidences and explanations, as required by the Assessing Officer from time to time. The documents and evidences so collected by the assessing officer were examined by him and assessing officer did not find any mistake Page | 9 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. and error in the books of accounts, except to say that assessee did not maintain day-to day stock register. 14. Before me, the assessee submitted, the following documents and evidences along with audited books of accounts, (which were already submitted before Ld.CIT(A) and AO), which are as follows, viz: (i) Details of stock (vide Pb.18), (ii) Ledger account of Transportation expenses (vide Pb.19 – 20), (iii) Confirmation of accounts of Fab Tech Manufacturing Pvt. Ltd. (vide Pb.21 – 23), (iv) Acknowledgement of Return of Income of Fab Tech Manufacturing Pvt. Ltd. (vide Pb.24), (v) Confirmation of accounts of Sunshine Enterprise (vide Pb.25 – 28), (vi) Acknowledgement of Return of Income of Sunshine Enterprise (vide Pb.29), (vii) Confirmation of accounts of Srinathji Engineering (vide Pb.30), (viii) Acknowledgement of Return of Income and Computation of Income (vide Pb.31 – 32), (ix) Audit report along with audited financial statements (vide Pb.33 – 48). 15. From the above details and documents, as furnished by the assessee before the Assessing Officer, it is vivid that Assessing Officer did not find any defect in the books of accounts and confirmations of ledger accounts and return of income filed by the assessee. The assessee’s books of account are rejected by the assessing officer solely on the reason that the assessee has not submitted day to day quantitative stock detail. I note that it cannot be a reason to reject the books of accounts, particularly, when there is no failure on the part of the assessee to submit entire audited books of accounts, bills and vouchers, confirmations, yearly quantitative stock and other details, as and when required by the Assessing Officer. It is Page | 10 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. not the case of the assessee that assessee has failed to produce audited books of accounts, bills, invoices, confirmations, ledger accounts and quantity stock daily on yearly basis. The Assessing Officer has failed to point out any specific defects in the confirmations, ledger accounts and books of accounts, therefore rejection of books of accounts by the assessing officer is not justified. 16. I also find that for assessment year 2013-14, the accounts of the assessee were subject to audit and subject to scrutiny assessment and in scrutiny assessment, the books of accounts were not rejected by the assessing officer and whatever gross profit declared by the assessee in A.Y 2013-14, has been accepted by the Assessing Officer. The assessee is running the same business, and same facts and circumstances are prevailing in the current year therefore assessee`s books of accounts should not be rejected solely on the reason that assessee is not maintaining day-to-day stock register, particularly when the assessee has submitted monthly and yearly stock register. Moreover, in assessment year 2013-14, the assessee was not maintaining day-to-day stock register (and maintaining only yearly stock register), however, the Assessing Officer did not reject books of accounts of the assessee for assessment year 2013-14. I note that assessee has been doing the same business, therefore when the assessee has submitted entire audited books of accounts, ledger accounts, confirmations, monthly stock and yearly stock details, and whatever other documents required by the Assessing Officer were submitted and explanations were provided by the assessee, hence in this scenario, considering same facts and circumstances, the books of accounts of the assessee should not be rejected. Page | 11 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. 17. The main plank on which the Assessing Officer rejected the books of accounts is that assessee was not maintaining day-to-day stock register. In this regard, we note that Hon`ble Jurisdictional High Court of Gujarat in the case of Jaytick Intermediates (P.) Ltd, [2016] 73 taxmann.com 195 (Gujarat) held that non-maintaining of day-to-day stock register is not a ground to reject books of accounts. The findings of the Hon`ble Court is reproduced below: “8. It will not be out of place to mention here that the assessee is a manufacturing unit and it has to pay the excise duty. It is the specific contention of the assessee that the books of accounts maintained by it are tallying and the excise duty is paid on that basis. The stock register is not tallying with the other books of account only because some of the items were not deleted from the stock register. Taking into account the decision of this Court, not maintaining the day-to- day stock register is not a ground to reject the books of account. In Symphony Comfort Systems Ltd. (supra), it is observed as under:- 'Question No.1 pertains to the addition made by the Assessing Officer on the basis of low gross profit. The Commissioner (Appeals) as well as the Tribunal, however, deleted such addition after examining the material on record. In particular, the Tribunal while upholding the order of the Commissioner (Appeals) in this respect, made following observations: "4. On consideration of the rival submissions, we do not find any justification to interfere with the order of the learned CIT(A) in deleting the addition. The AO merely gone by the fact that there was a fall in the gross profit rate as compared to the preceding assessment year which itself is no ground to reject the books of accounts of the assessee. No specific defect in the maintenance of the books of accounts by the assessee has been pointed out AO. The AO further noted that day to day stock and inward and outward registers are maintained on computer. Perhaps, this was the sale reason which swayed the AO to reject the books of accounts and make the addition. Now-a-days it is common knowledge that all the records are maintained on computer including by the government and semi government organizations. Even if, records are maintained on computer is not ground to reject the explanation of the assessee. The AO should have verified the entries from the computerized records also to point out any defect thereon. In the absence of any specific defect pointed out in the books of accounts and the records maintained on computer, the AO was not justified in rejecting the books results, or to enhance the gross profit rate. Accordingly, there is no merit in this ground of appeal of the revenue. The same is accordingly, dismissed." Page | 12 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. From the above, it can be seen that the entire issue is based on appreciation of evidence on record. No question of law, therefore, arises particularly when the Commissioner (Appeals) as well as the Tribunal concurrently held in favour of the assessee. Issue No.2 pertains to the additions made by the Assessing Officer on account of excessive expenses. The Commissioner (Appeals) as well as the Tribunal, however were of the opinion that such additions were not justified. The Tribunal while upholding the view of the Commissioner (Appeals), made following observations : "6. On consideration of the rival submissions, we do not find any merit in this ground of appeal of the revenue. The AO merely made comparative study of the expenses for the year under consideration with the preceding assessment year and found that expenses incurred in the preceding assessment year were 2.89% on turnover but in the assessment year under appeal it was 4.78% on the turnover. The expenses were, therefore, found excessive without pointing out as to which of the expenses incurred by the assessee was not connected with the business activity of the assessee. The AO has not pointed out which of the expenditure were not admissible in law. In the absence of any pointing out inadmissible expenses, the AO cannot make addition merely by comparing the expenditure with the preceding year's expenditure. The learned CIT(A) on proper appreciation of the facts and material on record rightly deleted the addition. This ground of appeal of the revenue is accordingly dismissed." The entire issue is based on appreciation of evidence. No question of law arises. When the Commissioner (Appeals) as well as the Tribunal concurrently held that on the basis of the evidence, addition as made by the Assessing Officer was not justified, we are not inclined to interfere.' 9. In Smt. Poonam Rani (supra), it is observed as under:— "10. During the course of arguments before us, it was submitted by the learned counsel for the appellant that the assessee was not maintaining the Daily Stock Register. We, however, find no such finding in the assessment order. On the other hand, we note that the Assessee had submitted before the Commissioner of Income Tax (Appeals) that Form 3CD containing all the quantitative details in respect of raw materials as well as the finished goods, duly audited by the Certified Accountant had been placed on record, but, the Assessing Officer ignored those actual figures enclosed with the return. In any case, no statutory provision under the Income Tax regime requiring the assessee to maintain the Daily Stock Register has been brought to our notice. Hence, even if no such register was being maintained by the assessee as is contended by the learned counsel for the appellant, that by itself does not lead to inference that it was not possible to deduce the true income of the assessee from the accounts maintained by her, nor the accounts can be said to be defective or incomplete for this reason alone. If stock register is not maintained by the assessee that may put the Assessing Officer on guard against the falsity of the return made by the assessee and persuade him to carefully scrutinize the account books of the assessee. But the absence of one register alone does not amount to such a material as would lead to the Page | 13 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. conclusion that the account books were incomplete or inaccurate. Similarly, if the rate of gross profit declared by the assessee in a particular period is lower as compared to the gross profit declared by him in the preceding year, that may alert the Assessing Officer and serve as a warning to him, to look into the accounts more carefully and to look for some material which could lead to the conclusion that the accounts maintained by the assessee were not correct. But, a low rate of gross profit, in the absence of any material pointing towards falsehood of the accounts books, cannot by itself be a ground to reject the account books under Section 145(3) of the Act." 10. In view of above observations and considering the facts of the case, we are of the opinion that the view taken by CIT (Appeals) is required to be accepted by setting aside the impugned order of the Tribunal. Accordingly, the question posed for our consideration is answered in favour of the assessee and it is held that the Tribunal has erred in upholding the action of the Respondent in rejecting the books of accounts of the Assessee under Section 145 (2) of the Act and further erred in confirming the part of the addition on estimated basis against the revenue. Accordingly, Tax Appeal No.1196 of 2007 is allowed.” 18. My view is also fortified by the judgment of the Coordinate Bench of ITAT Chandigarh, in the case of Paramount Impex, [2020] 117 taxmann.com 802 (Chandigarh - Trib.) wherein it was held that mere fact of non-maintenance of stock register could not be basis for rejection of books of accounts. I note that other stand taken by the assessing officer is that assessee has not produced the bills of transportation charges and assessee has received the excess advance amount from the customers. I note that since assessee has never incurred transportation expenses and the purchasers who purchased the goods used to bear the transportation expenses. Moreover, the assessee has not debited in its profit and loss account and never claimed the transportation expenses in the profit and loss account. Therefore, there is no question to produce the bills for transportation expenses. Apart from this I also note that it is custom of the trade that assessee sometimes receives advances from the customers. Such advances should not be the basis to reject the books of accounts. Hence, I note that rejection of books of account by the Assessing Page | 14 ITA.559/SRT/2023/AY.2015-16 Royal Sales & Co. Officer is not valid. Therefore, respectfully following the judgement of the hon’ble jurisdictional Gujarat High Court, in the case of Jaytick Intermediates (P.) Ltd (supra), I do not agree with ld CIT(A) to confirm the action of the Assessing Officer to reject the books of accounts of the assessee and I, therefore, direct the Assessing Officer to tax only taxable income declared by the assessee in its return of income as per audited books of accounts. Thus, ground Nos. 2 and 3 raised by the assessee are allowed. 19. Since, I have allowed the appeal of the assessee, by allowing ground Nos. 2 and 3, therefore ground No.1 raised by the assessee, in the impugned assessment proceedings, is rendered academic and infructuous therefore, I do not adjudicate the same. 20. In the result, appeal filed by the assessee is allowed. Order is pronounced on 23/10/2023 in the open court. Sd/- (Dr. A.L. SAINI) ACCOUNTANT MEMBER स ू रत / Surat Ǒदनांक/ Date: 23/10/2023 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat