ACIT, Patiala V. M/s DSG Papers Pvt. Ltd., Patiala

ITA 667/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6655 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 21-02-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 30-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE MS.DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.667/CHD/2016 (ASSESSMENT YEAR : 2012-13) THE A.C.I.T., VS. M/S DSG PAPERS PVT. LTD., CIRCLE, PATIALA. #6 GREEN VIEW COLONY, PATIALA. PAN: AACCD1450A (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.CHANDER KANTA, DR RESPONDENT BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 11.10.2017 DATE OF PRONOUNCEMENT : 02.11.2017 ORDER PER ANNAPURNA GUPTA, A.M. : THIS APPEAL FILED BY THE REVENUE HAS BEEN PREFERRED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS), PATIALA (HEREINAFTER REFERRED TO AS CIT(APPEALS)) DATED 21.3.2016 RELATING TO ASSESSM ENT YEAR 2012-13. 2. THE ONLY ISSUE IN THE PRESENT APPEAL PERTAINS TO REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE INC OME TAX ACT, 1961 (IN SHORT THE ACT). 3. BRIEFLY STATED, THE ASSESSEE IS A MANUFACTURER O F WRITING AND PRINTING PAPER UNDER THE NAME AND STYLE OF M/S DSG PAPERS PVT. LTD. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE ASSESSING OFFICER NOTED SEVERAL DISCREPANCIES SUCH AS DECLINE IN THE NET PROFIT RAT E AS COMPARED TO PRECEDING YEAR, THE VARIATION IN THE 2 CONSUMPTION OF ELECTRICITY, YIELD SHOWN BY THE ASSE SSEE AGAINST RAW MATERIAL CONSUMPTION BEING LOWER AS COM PARED TO THAT BY ANOTHER COMPARABLE COMPANY,& NON-MAINTEN ANCE OF STOCK REGISTER AND PRODUCTION REGISTER. THE ASS ESSEE WAS ASKED TO FURNISH JUSTIFICATION OF THE SAME. DETAIL ED SUBMISSIONS WERE FILED BY THE ASSESSEE WHICH ARE REPRODUCED IN THE ASSESSMENT ORDER FROM PAGE NOS.7 TO 12. NOT BEING SATISFIED WITH THE SAME, THE ASSESSING OF FICER REJECTED BOOKS OF ACCOUNT AND FURTHER APPLIED RATE OF GROSS PROFIT AT 15%. 4. AGGRIEVED BY THE SAME THE ASSESSEE CARRIED THE M ATTER IN APPEAL BEFORE THE LD.CIT(APPEALS). DETAILED SUB MISSIONS WERE FILED BEFORE THE LD.CIT(APPEALS) WHICH ARE REP RODUCED AT PARA 6.1 OF THE ORDER. THE SAID SUBMISSIONS WER E FORWARDED TO THE ASSESSING OFFICER FOR HIS COMMENTS . AFTER CONSIDERING SUBMISSIONS OF THE ASSESSEE AND COMMENT S OF THE ASSESSING OFFICER THE LD.CIT(APPEALS) HELD THAT THERE WAS NO REASON FOR REJECTING BOOKS OF ACCOUNT OF THE ASSESSEE. 5. AGGRIEVED BY THE SAME, THE REVENUE HAS COME UP I N APPEAL BEFORE US, RAISING FOLLOWING GROUNDS: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.52,98,393/- MADE BY THE ASSESSING OFFICER AFTER REJECTING ASSESSEE'S BOOKS OF ACCOUNT U/S 145(3) OF THE INCOME TAX ACT, 1961. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN NOT UPHOLDING THE REJECTI ON OF BOOKS OF ACCOUNT U/S 145(3) OF THE INCOME TAX AC T, 1961, DESPITE THE FACT THAT DURING THE COURSE OF 3 ASSESSMENT PROCEEDINGS, THE AO HAS POINTED OUT CERTA IN DEFICIENCIES IN ASSESSEE'S BOOKS. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET AS IDE AND THAT OF THE ASSESSING OFFICER RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND FINA LLY DISPOSED OF. 6. DURING THE COURSE OF HEARING BEFORE US THE LD. D R RAISED THE CONTENTION THAT DESPITE SEVERAL GROUNDS HAVING BEEN RAISED BY THE ASSESSING OFFICER FOR REJECTING BOOKS OF ACCOUNT OF THE ASSESSEE, THE LD.CIT(APPEALS) HAD SE T ASIDE THE REJECTION MERELY BY DEALING WITH ONE GROUND I.E . THE ASSESSEE HAD SHOWN FAVOURABLE PROFIT RESULTS AS COM PARED TO THE PREVIOUS YEAR. THE LD. DR DREW OUR ATTENTIO N TO THE REASONS FOR REJECTING BOOKS OF ACCOUNT OF THE ASSES SEE. THE LD. D.R. THEREAFTER DREW OUR ATTENTION TO THE FINDI NGS OF THE LD.CIT(APPEALS) AT PARA 6.4 OF HIS ORDER TO SHOW TH AT THE LD.CIT(APPEALS) HAD NOT DEALT WITH ALL THE CONTENTI ONS RAISED BY THE ASSESSING OFFICER WHILE REJECTING BOO KS OF ACCOUNT. 7. THE LD. COUNSEL FOR ASSESSEE, ON THE OTHER HAND , STATED THAT THE LD.CIT(APPEALS) HELD THAT THE ASSES SEE HAD SUBMITTED BOTH BEFORE THE ASSESSING OFFICER AND CIT(APPEALS) AND DEALT WITH ALL THE CONTENTIONS RAI SED BY THE ASSESSING OFFICER WHILE REJECTING BOOKS OF ACCO UNT AND THE LD.CIT(APPEALS) HAD AFTER CONSIDERING ALL THESE SUBMISSIONS SET ASIDE THE REJECTION OF BOOKS OF ACC OUNT. 8. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIE S. THE ISSUE BEFORE US PERTAINS TO REJECTION OF BOOKS OF 4 ACCOUNT U/S 145(3) WHICH HAS BEEN SET ASIDE BY THE LD.CIT(APPEALS) AND THE REVENUE IS CONTESTING THE S AME FOR THE REASON THAT THE LD.CIT(APPEALS) HAS NOT PASSED A SPEAKING ORDER DEALING WITH ALL THE CONTENTIONS RAI SED BY THE ASSESSING OFFICER WHILE REJECTING BOOKS OF ACCO UNT. THE PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE BO OKS OF ACCOUNT WERE REJECTED FOR THE REASONS AS MENTIONED AT PAGE 12-15 OF THE ASSESSMENT ORDER AS UNDER REASONS: I) ASSESSEE'S SUBMISSION ABOUT THE DOWNWARD TREND REGARDING THE GROSS PROFIT RATE AND NET PROFIT RATE IS NOT CONVINCING. ALTHOUGH THE GROSS PROFIT RATE DURING T HE YEAR UNDER CONSIDERATION HAS SHOWN LITTLE BIT IMPROVEMEN T FROM 13.89% TO 14.22% WHEN COMPARED WITH THE LAST YEAR. HOWEVER, THE GROSS PROFIT RATE IS DEFINITELY ON LOW ER SIDE WHEN COMPARED WITH THE GROSS PROFIT RATES OF 15.94% FOR A.Y. 2010-11 AND 16.18% FOR A.Y. 2009-10. THE TREND OF THE NET PROFIT RATE HAS SHOWN REGULAR DECLINE IN THE LAST FOUR YEARS. DURING THE YEAR UNDER CONSIDERATION IT IS ONL Y 4.44% AS COMPARED TO 4.60% FOR A.Y. 2011-12, 4.67% FOR A. Y. 2010-11 AND 4.69% FOR A.Y. 2009-10. THE ASSESSEE H AS FAILED TO PRODUCE ANY EVIDENCE TO JUSTIFY THE DECLINI NG TREND IN THE GROSS PROFIT RATE AND NET PROFIT RATE. II) THE ASSESSEE COULD NOT FURNISH ANY PLAUSIBLE EXPLANATION REGARDING HUGE VARIATION IN THE YIELD O F FINISHED PRODUCTS WHICH WAS 80% IN THE MONTH OF APRIL AND ON LY 71.72 % IN THE MONTH OF JUNE. SIMILARLY THE VARIATION I N THE CONSUMPTION OF ELECTRICITY UNITS EXPLAINED BY THE A SSESSEE IS NOT SUPPORTED BY ANY CORROBORATIVE EVIDENCE. III) THE FACTS OF THE CASE INDICATE THAT THE ASSESSEE WAS ENJOYING A FAVORABLE MARKET CONDITIONS AND THERE IS N O INDICATION TO SUGGEST THAT THE ASSESSEE WAS STRUGGLI NG IN THE MARKET. IN SUCH A SITUATION, THE GROSS PROFITS AND NET PROFITS SHOULD NOT HAVE DOWNWARD TREND. THE ASSESSEE COULD NO T BRING ANYTHING ON RECORD TO PROVE THAT THERE WAS DO WNWARD TREND IN PROFIT DUE TO ADVERSE MARKET CONDITIONS. RATH ER, ITS TURNOVER HAS INCREASED BY MORE THAN 10% DURING THE PER IOD. IV) ASSESSEE HAS NOT FURNISHED ANY DAY-TO-DAY RECORD OF THE CONSUMABLES AND WASTAGE. NO STOCK REGISTER FOR THE RECORD OF THE CONSUMABLES HAS BEEN MAINTAINED. V) NO DAY TO DAY PRODUCTION REGISTER HAS BEEN FURNI SHED BY THE ASSESSEE. IN SUCH A SITUATION, THE PRODUCTION R ESULTS OF THE ASSESSEE CANNOT BE VERIFIED. THE RECORDS MAIN TAINED FOR THE PURPOSES OF EXCISE DEPARTMENT CANNOT BE SUBSTITUTABLE FOR THE PURPOSE OF INCOME TAX ACT, 19 61 AS 5 THE INTENSIONS AND OBJECTIVES OF THE TWO STATUTES A RE ENTIRELY DIFFERENT. THERE IS NO RECORD ON DAY TO DAY BASIS REGARDING THE EXTENT OF WASTAGE MAINTAINED BY THE ASSESSEE. VI) THE DETAIL OF CONSUMPTION OF RAW MATERIAL, ELECTRICITY UNITS CONSUMED AND FINISHED PRODUCTS PRODUCED REVEAL WIDE VARIATIONS. VII) THE AVERAGE YIELD SHOWN BY YOU FOR THE YEAR UNDER CONSIDERATION IS VERY LOW AS COMPARED TO THAT OF M/S VISHAL PAPER INDUSTRIES PVT. LTD., VILLAGE KHUSROPUR, MAIN ROAD, PATIALA. ASSESSEES SUBMISSION THAT THEY ARE NOT IN A POSITION TO COMMENT ON THE PRODUCTION RESULT OF THE M/S VISHAL PAPER INDUSTRIES PVT. LTD, VILLAGE KHUSROPUR FOR WANT OF AVAILABILITY OF DATA OF THAT CONCERN WITH THEM IS BASELESS BECAUSE M/S VISHAL PAPER INDUSTRIES PVT LTD. IS ONE OF THE CLOSE RELATED CONCERN OF THE ASSESSEE. 9. THE ASSESSEE, WE FIND HAS FILED SUBMISSIONS VIS- A-VIS EACH GROUND RAISED BY THE ASSESSING OFFICER WHICH W E FIND IS REPRODUCED AT PARA 6.1 OF THE LD.CIT (APPEALS)S ORDER. THE LD.CIT (APPEALS) AFTER HIGHLIGHTING THE SUBMISS IONS OF THE ASSESSEE FOUND THAT THERE WAS NO REASONS FOR RE JECTING BOOKS OF ACCOUNT AT ALL SINCE ALL THE CONTENTIONS O F THE ASSESSING OFFICER HAD BEEN PROPERLY DEALT WITH AND EXPLAINED BY THE ASSESSEE. THE RELEVANT ORDER OF T HE LD.CIT (APPEALS) AT PARAS 6.3 AND 6.4 IS AS UNDER: 6.3 I HAVE CONSIDERED THE WRITTEN SUBMISSIONS PUT F ORTH BY THE APPELLANT AND COMMENTS OF THE ASSESSING OFFI CER AND ALSO THE FACTS OF THE CASE. THE ISSUE INVOLVED IS WI TH REGARD TO APPLICATION OF 15% GROSS PROFITS RATE AND REJECTION OF AUDITED BOOKS OF ACCOUNTS MAINTAINED UNDER THE LAW AN D OTHER PRODUCTION RECORD MAINTAINED UNDER THE CENTRAL E XCISE ACT. IT IS FURTHER OBSERVED THAT THE TURNOVER OF THE APPELLANT COMPANY HAS INCREASED IN THE YEAR UNDER CONSIDERATION FROM RS.46.50 CRORE TO RS.59.15 IN THE IMMEDIATELY PRECEDI NG YEAR, THEREBY SHOWING A GROWTH OF ABOUT 27.22%. HOWEV ER, THE TURNOVER OF THE APPELLANT COMPANY INCREASED FRO M RS.59.15 CRORE TO RS.65.13 CRORE DURING THE YEAR EN DED 31.03.2013, THEREBY SHOWING A GROWTH OF ABOUT 10.09%. TH E GROSS PROFIT RATE HAS GONE UP FROM 13.88% TO 14.22% THUS SHOWING A POSITIVE GROWTH OF 0.34%. THE APPELL ANT COMPANY EXPLAINED THE FALL IN NET PROFIT RATE OF 0.16% WHICH 6 IS ON ACCOUNT OF FINANCIAL EXPENSES WHICH HAVE GONE UP BY ABOUT RS.60.87 LACS. THE FINANCE EXPENSES HAVE INCRE ASED ON ACCOUNT OF LOANS RAISED BY THE APPELLANT COMPANY FOR ITS BUSINESS. IT IS PERTINENT TO KEEP IN VIEW THAT THESE FACTS AND FIGURES HAVE NEITHER BEEN CHALLENGED NOR REBUTTED BY TH E A.O. THE APPELLANT ALSO SUBMITTED THE VARIOUS DETAILS T O SUBSTANTIATE THE FALL IN NET PROFITS / SALES PRICE/ I NCREASED COST PRICE AS UNDER: TOTAL SALES YEAR AMOUNT (IN RS ) QUANTITY (IN MT) PRICE PER KG 2010 464,979,186.00 25632.863 18.14 2011 591,552,749.00 27987.809 21.14 2012 651,265,139.00 29889.147 21.79 SALES (F.G.) YEAR AMOUNT (IN RS ) QUANTITY (IN MT) PRICE PER KG 2010 440,556,520.00 19392.434 22.72 2011 570,967,992.00 23948.794 23.84 2012 619,369,172.00 23392.850 26.48 YEAR 2010 2011 GROSS TURNOVER (CUM DUTY) 479,759,157.00 613,022,186.00 LESS : EXCISE DUTY 14,779,971.00 21,469,437.00 TURNOVER NET OF EXCISE 464,979,186.00 591,552,749.00 LESS : OTHER SALES 24,422,666.00 20,584,757.00 SALE OF FINISHED GOODS 440,556,520.00 570,967,992.00 TOTAL PURCHASES YEAR AMOUNT (IN RS ) QUANTITY (IN MT) PRICE PER KG 2010 258,415,820.00 24403.106 10.5 9 2011 396,333,527.40 34036.775 11.6 4 2012 390,839,615.44 32474.093 12.0 4 RAW MATERIAL CONSUMED & PURCHASES (TRADED ) YEAR AMOUNT (IN RS ) QUANTITY (IN MT) PRICE PER KG 2010 270,540,441.91 30643.535 8.83 2011 371,564,897.00 38075.79 9.76 2012 416,590,907.00 38970.390 10.69 7 PURCHASES (WP) YEAR AMOUNT (IN RS ) QUANTITY (IN MT) PRICE PER KG 2010 204,427,010.00 30643.535 6.67 2011 331,282,286.40 38075.79 8.70 2012 337,162,334.00 38970.390 8.65 FROM THE PERUSAL OF THE ASSESSMENT ORDER IT IS OBSERV ED THAT THE APPELLANT FILED DETAILED FACTUAL POSITION WITH REGARD TO FALL IN NET PROFITS AND EVEN QUANTITATIVE AND QUALIT ATIVE INFORMATION WAS ALSO SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO SUBSTANTIATE SUCH FALL BUT T HE SAME HAVE NOT BEEN REBUTTED BY THE LD. A.O. BY BRINGIN G ANY POSITIVE MATERIAL ON RECORD. THE APPELLANT ALSO EMPHASIZ ED THAT THE TURNOVER OF THE ASSESSEE HAS INCREASED SUB STANTIALLY IN COMPARISON TO THE PRECEDING TWO YEARS. THERE IS N O DOUBT THAT THE SALES OF THE APPELLANT HAVE INCREASED BY 2 7% IN COMPARISON TO A.Y. 2010-11 WHEREAS IT INCREASED BY 10% IN COMPARISON TO A.Y. 2011-12. THE APPELLANT FURTHER CONTENDED THAT AUDITED BOOKS O F ACCOUNTS CANNOT BE REJECTED MERELY BECAUSE OF FALL IN GROSS PROFIT RATE AND ALSO RELIED UPON THE DECISION OF HON'BLE 3URISDICTIONAL PUNJAB & HARYANA HIGH COURT IN THE C ASE OF CIT KAMAL VS. OM OVERSEAS (2009) 315 ITR 185 (PUNJAB & HARYANA HIGH COURT). IN THAT CASE, THE HON'BLE HIGH COURT HAS HELD THAT 'IN THE ABSENCE OF ANY ILLEGALITY AND PERVERSITY IN THE FINDING OF FACT ARRIVED AT BY THE CIT(A) AND THE TR IBUNAL THAT THE ASSESSEE'S BOOKS OF ACCOUNT WERE REJECTED BY THE A. O. AND THE ADDITION WAS MADE WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN THE BOOKS OF ACCOUNT, IMPUGNED ADDITION WAS RIGHTLY DEL ETED AND NO SUBSTANTIAL QUESTION OF LAW ARISES FOR DETERMINATIO N.' RELIANCE IS ALSO PLACED ON THE JUDGEMENT REPORTED A T [2010] 326 ITR 223(DELHI) -COMMISSIONER OF INCOME-T AX VS SMT. POONAM RANI -HELD- ACCOUNTS-REJECTION- FALL IN GP R ATE- AO HAS NOT POINTED OUT ANY PARTICULAR DEFECT OR DISCREPANC Y IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE.FALL IN GP RA TE COULD NOT BY ITSELF BE A GROUND TO REJECT THE ACCOUNTS BY INV OKING S. 145(3)..FALL IN GP RATE CAN BE FOR VARIOUS REASONS SUCH AS INCREASE IN THE RAW MATERIAL COST, DECREASE IN MARK ET PRICE OF FINISHED PRODUCT 6.4 LOOKING INTO THE FACTS OF THE CASE, LEGAL POSITION AS EXPLAINED ABOVE AND FACTUAL POSITION PLACED ON RECO RD, IT IS AN UNDISPUTED FACT, THAT IN THE CASE OF THE APPELLANT THE G.P. RATE HAS NOT DECLINED COMPARED TO THAT OF THE PRECEDING YEAR . RATHER IT HAS IMPROVED. WITH REGARD TO FALL IN NET PROFITS, THE A PPELLANT HAS TENDERED AN ELABORATE EXPLANATION WHICH HAS NOT BEE N DEMOLISHED BY THE ASSESSING OFFICER BY BRINGING ON RECORD ANYT HING TO THE CONTRARY. FURTHER, IT IS ALSO NOTED THAT THE TURNOV ER OF THE APPELLANT INCREASED SUBSTANTIALLY IN COMPARISON TO PRECEDING TWO YEARS. MOREOVER, DETAILED QUANTITATIVE AND QUALITAT IVE INFORMATION IN CONNECTION WITH PURCHASES AND SALES WAS FURNISHE D BY THE APPELLANT REGARDING THE INCREASED SALES, SALES PRIC E, COST PRICE ETC. 8 PER METRIC TON IN CONNECTION WITH FALL IN NET PROFI TS WHICH SOMEHOW HAS NEVER BEEN REBUTTED BY THE REVENUE. THE LD. A.O . HAS NOT POINTED OUT ANY SPECIFIC DEFECT WITH SUPPORTIVE EVI DENCE IN THE AUDITED BOOKS OF ACCOUNTS AND HAS NOT GIVEN ANY FIN DING THAT THE APPELLANT HAS INFLATED THE COST OF RAW MATERIAL OR COST OF PROCESSING OR THAT IT HAS MADE SALES OF FINISHED PR ODUCT OUTSIDE THE BOOKS AND/OR SUPPRESSED THE SALE PRICE. THE ACTION OF THE A.O. OF APPLYING FLAT RATE OF 15% SPECIFICALLY WHEN THE AUD ITED BOOKS OF ACCOUNTS AND FINANCIAL RESULTS SHOW THAT GROSS PROF IT OF THE APPELLANT HAS INCREASED FROM 13.89% TO 14.22% IS AL SO NOT PROPER THAT TOO WHEN THE A.O. HAS NOT BROUGHT ANYTHING ADV ERSE ON RECORD. THE ARGUMENT OF THE A.O. THAT THE RECORDS M AINTAINED FOR THE PURPOSES OF EXCISE DEPARTMENT CANNOT BE SUBSTITUTED FOR THE PURPOSE OF INCOME TAX ACT IS ALSO NOT PROPER AS EXC ISE DUTY IS LEVIED ON THE PRODUCTION OF GOODS WHICH ARE EVENTUA LLY SOLD AND PROFITS ARE EARNED. IN OTHER WORDS, THE PRODUCTION RECORDS OF THE APPELLANT ARE AVAILABLE AND THE A.O. HAS NOT BROUGHT OUT ANY DISCREPANCY WITH REGARD THERETO. IN THESE CIRCUMSTANCE S, COMPARING THE PRODUCTION RESULTS OF THE APPELLANT WIT H THAT OF ANY OTHER CASE AND MAKING IT A REASON FOR REJECTING THE BOOKS OF ACCOUNT IS ALSO NOT PROPER SPECIFICALLY WHEN THE G ROSS PROFITS ARE PROGRESSIVE AND QUANTITATIVE DETAILS ET C. ARE DULY SUBMITTED. THEREFORE, I AM OF THE OPINION THAT THE A UDITED BOOKS OF ACCOUNTS HAVE WRONGLY BEEN REJECTED BASED ON CONVOLUTED AND THEORETICAL ARGUMENTS WITHOUT BRINGING ON RECORD ANY MATERIAL DISCREPANCY. HENCE THE DECISION OF THE A.O. IN REJECTING THE BOOKS OF ACCOUNT THEREAFTER AP PLYING A G.P. RATE OF 15% TO THE TURNOVER IS NOT UPHELD. 10. ON PERUSING THE SAME WE FIND NO MERIT IN THE CONTENTION OF THE LD. D.R. THAT THE LD.CIT (APPEALS ) HAS DISMISSED THE REJECTION OF BOOKS OF ACCOUNT WITHOUT DEALING WITH ALL THE CONTENTIONS OF THE ASSESSING OFFICER A ND MERELY ON THE BASIS OF BETTER GROSS PROFIT RESULTS SHOWN B Y THE ASSESSEE IN THE IMPUGNED YEAR. WE FIND THAT BESIDES TAKING INTO CONSIDERATION THIS FACT, THE LD.CIT (APPEALS) HAS ALSO GIVEN A FINDING , AFTER REPRODUCING THE FACTS WHICH THE ASSESSEE HAD DEMONS TRATED BEFORE HIM, THAT THE FALL IN THE NET PROFIT WAS DUL Y EXPLAINED BY THE ASSESSEE BY SHOWING THAT THERE WAS INCREASED COST PRICE OVER YEARS AND IT WAS ON ACCOUNT OF FINANCIAL EXPENSES 9 WHICH HAD GONE UP BY RS.60.87 CRORES THAT THE NET PROFIT HAD SHOWN A DECLINE. VIS--VIS NON-MAINTENANCE OF STOCK REGISTER THE LD .CIT (APPEALS) HAS HELD THAT THE EXCISE RECORDS MAINTAIN ED BY THE ASSESSEE COULD NOT BE REJECTED OR HELD TO BE NO T RELIABLE AND THUS IT COULD NOT BE SAID THAT PRODUCTION RECOR DS WERE NOT MAINTAINED BY THE ASSESSEE. THE LD.CIT(A) HAS ALSO NOTED THAT NO SPECIFIC DEFE CTS SUPPORTED WITH EVIDENCE HAVE BEEN POINTED OUT BY TH E AO NOR IS THERE ANY FINDING BY THE AO THAT THE ASSESSE E HAS INFLATED ITS COST OR SUPPRESSED SALES. NO INFIRMITY IN THE AFORESID OBSERVATIONS AND FIND INGS OF THE CIT(A) HAVE BEEN POINTED OUT TO US.WE THEREF ORE AGREE WITH THE LD.CIT(A) THAT THE ASSESSEE HAVING SHOWN PROGRESSIVE RESULTS IN THE IMPUGNED YEAR AND NOTHIN G ADVERSE HAVING BEEN BROUGHT ON RECORD AGAINST THE A SSESSEE IT WAS INCORRECT TO COMPARE THE RESULTS OF THE ASSE SSEE WITH ANY OTHER CASE AND MAKE IT THE BASIS OF REJECTION O F BOOKS OF ACCOUNTS OF THE ASSESSEE. 11. IN VIEW OF THE ABOVE, WE HOLD THAT THE LD.CIT (APPEALS) HAS TAKEN A HOLISTIC VIEW OF THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, CONSIDERED ALL THE ANOMA LIES POINTED OUT BY THE ASSESSING OFFICER WHILE REJECTIN G BOOKS OF ACCOUNT AND FINDING NO SUBSTANCE IN THE SAME HAS DU LY SET ASIDE THE SAME. WE DO NOT AGREE WITH THE LD. DR TH AT THE LD.CIT(APPEALS) HAD PASSED A NON-SPEAKING ORDER ON THE ISSUE. 10 12. WE, THEREFORE, UPHOLD THE ORDER OF THE LD.CIT ( APPEALS) AND, DISMISS THE GROUNDS OF APPEAL RAISED BY THE RE VENUE, 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2 ND NOVEMBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)S 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH