M/s C.S. Castings Pvt. Ltd., Mandi Gobindgarh v. DCIT, Mandi Gobindgarh

ITA 704/CHANDI/2014 | 2008-2009
Pronouncement Date: 27-04-2015 | Result: Partly Allowed

Appeal Details

RSA Number 70421514 RSA 2014
Assessee PAN AACCC1339D
Bench Chandigarh
Appeal Number ITA 704/CHANDI/2014
Duration Of Justice 8 month(s) 19 day(s)
Appellant M/s C.S. Castings Pvt. Ltd., Mandi Gobindgarh
Respondent DCIT, Mandi Gobindgarh
Appeal Type Income Tax Appeal
Pronouncement Date 27-04-2015
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 27-04-2015
Date Of Final Hearing 27-04-2015
Next Hearing Date 27-04-2015
Assessment Year 2008-2009
Appeal Filed On 07-08-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT ITA NO. 704/CHD/2015 ASSESSMENT YEAR: 2008-09 M/S C.S. CASTINGS PVT. LTD. VS. THE DCIT CIRCLE MANDI GOBINDGARH MANDI GOBINDGARH PAN NO. AACCC1339D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI S.K. MITTAL DATE OF HEARING : 27.04.2015 DATE OF PRONOUNCEMENT : 27.04.2015 ORDER PER H.L.KARWA VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A) PATIALA DATED 27.05.2014 RELATING TO ASSESSMENT YEA R 2008-09. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT 1961 BY LD. CIT(A) PATIALA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD. ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT. 2. THAT HE WAS FURTHER NOT JUSTIFIED TO UPHOLD THE ADDITION OF RS. 9 50 000/- OUT OF TOTAL ADDITION OF RS. 16 77 918/- MADE BY LD. ASSESSING OFFICER ON PRESUM PTUOUS GROUNDS. 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT AS SESSEE IS A PRIVATE LIMITED COMPANY. FOR THE ASSESSMENT YEAR 2008-09 THE ASSE SSEE SUBMITTED THE RETURN OF INCOME ON 29.09.2008 DECLARING TOTAL INCOME AT NIL. THE CASE WAS SELECTED FOR SCRUTINY. STATUTORY NOTICES ALONG WITH QUESTIONNAIR E WERE ISSUED TO THE ASSESSEE. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACT URING OF STEEL INGOTS. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS CLAIMED T O HAVE MADE PURCHASE OF PIG IRON WORTH OF RS. 39 90 891/- FROM M/S ROHIT ISPAT (INDIA) MANDI GOBINDGARH AND M/S SHREE BALAJI ISPAT MANDI GOBINDGARH. M/S ROHIT ISPAT (INIDA) HAS SOLD PIG IRON VIDE NINE SEPARATE BILLS ALL ISSUED IN JUN E - JULY 2007AND M/S SHREE BALAJI ISPAT MGG HAS SOLD PIG IRON VIDE TWO SEPARAT E BILLS DATED 3.10.2007. THE ASSESSING OFFICER OBTAINED A REPORT FROM CENTRAL EX CISE AUTHORITIES THROUGH REGIONAL ECONOMIC INTELLIGENCE COUNCIL CHANDIGARH IN THE CASE OF ROHIT ISPAT (INDIA) AND M/S SHREE BALAJI ISPAT IN WHICH IT WAS POINTED OUT THAT ROHIT ISPAT (PROP SHRI SURESH YADAV AND SBI) WERE INDULGED IN N EFARIOUS TRADING ACTIVITIES ONLY ON PAPER AS THEY WERE FOUND TO BE PASSING ON C ENVAT CREDIT FRAUDULENTLY WITHOUT ACTUAL RECEIPT DISPATCH AND STORAGE OF EXC ISABLE GOODS. ACCORDING TO ASSESSING OFFICER THE ASSESSEE BEING ONE OF THE FU RNACE UNITS HAVE MADE PURCHASE OF PIG IRON FROM ROHIT ISPAT (INDIA) AND M /S SHREE BALAJI ISPAT. AS PER THE ASSESSING OFFICER M/S ROHIT ISPAT (INDIA) AND M /S SHREE BALAJI ISPAT WERE INDULGED IN ONLY ON THE PAPER TRANSACTIONS WITHOUT CARRYING OUT ANY ACTUAL TRADING ACTIVITY. THEREFORE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES TRANSACTIONS WITH M/S ROHIT ISPAT (INDIA) AND M/S S HREE BALAJI ISPAT AS GENUINE IN SPITE OF THE ASSESSEES CLAIM OF MANUFACTURING A GAINST SUCH PURCHASES AND MAINTENANCE OF PROPER PRODUCTION RECORD. THE ASSESS ING OFFICER ALSO OBSERVED THAT THERE MAY BE VARIOUS REASONS FOR ASSESSEE FOR TAKING BOGUS BILL OF TRADING FROM M/S ROHIT ISPAT (INDIA) AND M/S SHREE BALAJI I SPAT. THE ASSESSING OFFICER POINTED OUT THAT ONE OF THE OBVIOUS REASON IS TO EV ADE EXCISE DUTY. SECONDLY IT IS WELL KNOWN THAT THE DUTY FREE SCRAP FROM DEALERS DOING UNACCOUNTED TRADING IS 3 ALWAYS CHEAPLY AVAILABLE IN THE MARKET. THIRDLY AC CORDING TO ASSESSING OFFICER THERE ARE A VERY LARGE NUMBER OF VARIABLES LIKE BUR NING LOSS PRODUCE OF BY- PRODUCT OF RUNNERS AND RISERS AND OTHER CONSUMABLES INVOLVED IN THE PROCESS OF MANUFACTURING AGAINST WHICH INFLATED OR BOGUS PURCH ASES CAN EASILY BE ADJUSTED WITHOUT DETECTION AS MINUSCULE CHANGE IN SUCH VARIA BLE CAN BRING ABOUT SUBSTANTIAL CHANGE IN YIELD IN VALUE TERMS AND FINI SHED GOODS BEING DEPENDENT IN SUCH VARIABLES CAN BE JUSTIFIED. FOR THE DETAILED R EASONS GIVEN IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HELD THAT THERE ARE BO GUS TRANSACTIONS AS DISCUSSED IN THE ASSESSMENT ORDER AND THEREFORE ASSESSEES BOOKS OF ACCOUNT ARE TREATED UNRELIABLE AND INCORRECT AND THE BOOKS OF ACCOUNT O F THE ASSESSEE WERE REJECTED U/S 145(3) OF THE INCOME-TAX ACT 1961. THE ASSESSI NG OFFICER ALSO NOTED THAT ASSESSEE HAS ITSELF REVERSED THE CENVAT CREDIT AMOU NTING TO RS. 1 67 122/- AVAILED ON PURCHASES SHOWN FROM M/S SHREE BALAJI IS PAT DURING THE YEAR UNDER CONSIDERATION AND RS. 4 97 447/- AVAILED ON PURCHAS ES SHOWN FROM M/S ROHIT ISPAT (INDIA) DURING SUBSEQUENT ASSESSMENT YEAR ADM ITTEDLY BY CREDITING THE CENVAT ACCOUNTS AND DEBITING THE PURCHASE ACCOUNTS THUS REDUCING ITS PROFIT TO THIS EXTENT. ACCORDING TO ASSESSING OFFICER IN THE CASE OF BOGUS PURCHASE THE MANUFACTURER WRONGLY SHOWS THE AVAILABILITY OF CENV AT (ON SUCH BOGUS PURCHASES) THUS POCKETING THE BENEFIT EQUIVALENT TO CENVAT AMOUNT. ACCORDING TO ASSESSING OFFICER IN THIS CASE THE ASSESSEE REC EIVED EXCISE DUTY ELEMENT ON ITS SALES FROM THE CUSTOMERS BUT PAID TO THE GOVERN MENT ONLY THAT AMOUNT WHICH REMAINS PAYABLE AFTER REDUCING THE CENVAT CREDIT AV AILABLE WITH IT. ACCORDING TO THE ASSESSING OFFICER THE CENVAT CREDIT TO THE EXTENT OF RS. 6 64 569/- ( RS. 167122 + 497447) BEING BOGUS IT IS CLEAR THA T ASSESSEE POCKETED THE PART OF THE EXCISE DUTY COLLECTED TO THIS EXTENT I.E. RS . 6 64 569/-. THE ASSESSING OFFICER CONCLUDED THAT ASSESSEES BOOKS OF ACCOUNT CANNOT BE ACCEPTED. HE THEREFORE ENHANCED THE GP RATE DECLARED BY THE ASS ESSEE. THE ASSESSEE HAS DECLARED GP RATE OF 5.80% ON TOTAL TURNOVER OF RS. 24 04 16 702/-. THE ASSESSING OFFICER ACCEPTED THAT THE GP RATE OF 5.8% DECLARED BY THE ASSESSEE IN 4 THIS YEAR IS BETTER THAN THE LAST YEARS GP RATE OF 4.61%. HOWEVER THE ASSESSING OFFICER OPINED THAT THE FACT CANNOT BE DENIED THAT THE GP DECLARED BY THE ASSESSEE IN THIS YEAR CAN BE STILL MORE HAD THE AS SESSEE NOT RESORTED TO BOGUS TRANSACTIONS. CONSEQUENTLY THE ASSESSING OFFICER E NHANCED THE GP DECLARED BY THE ASSESSEE TO 6.50% AS AGAINST 5.80% DECLARED BY THE ASSESSEE ON THE TOTAL TURNOVER OF RS. 24 04 16 702/- WHICH RESULTED INTO THE ADDITION OF RS. 16 77 918/-. 4. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A). 5. THE LD.CIT(A) REDUCED THE ADDITION TO RS. 9 50 0 00/- AS AGAINST RS. 16 77 918/- MADE BY THE ASSESSING OFFICER OBSERVIN G AS UNDER:- 4.4 I HAVE CONSIDERED THE SUBMISSIONS MADE. THE FA CTS MARSHALED BY THE A.O. DISCUSSED IN THE PRECEDING PARAGRAPHS AMPL Y PROVES THAT THE ENTIRE PURCHASES FROM M/S ROHIT ISPAT BOGUS. THE FI NDINGS OF THE EXCISE AUTHORITIES WERE CONFIRMED BY THE A.O. BY MAKING IN DEPENDENT ENQUIRY WHICH REVEALED THAT M/S ROHIT ISPAT WAS NOT DOING A NY ACTUAL TRADING ACTIVITY. THE DIRECTOR OF THE ASSESSEE COMPANY AGRE ED TO REVERSE THE CENVAT WHICH ALSO ENDORSES THE FACT THAT THE TRANSA CTION WAS BOGUS. THE ASSESSEE WAS CONFRONTED WITH THE STATEMENT OF SR. Y ADAV SR. SUBHAS AND SH. KARANVIR SINGH & SH. JASWINDER SINGH DURING THE ASSESSMENT PROCEEDING. THE ASSESSEE WAS ALSO INFORMED ABOUT TH E ENQUIRIES MADE BY THE DEPT. AND WAS ALSO ASKED TO PRODUCE THE PROPRIO TER OF M/S ROHIT ISPAT AND PARTNER OF M/S BALAJI ISPAT WHICH COULD NOT BE COMPLIED WITH BY THE ASSESSEE. IT COULD NOT GET EVEN THE COPY OF A/C OF M/S ROHIT ISPAT & M/S BALAJI ISPAT CONFIRMED. THUS THE APPELLANT FAILED TO DISCHARGE HIS ONUS. LOOKING INTO THE FACTS OF THE CASE IT CAN NOT BE SA ID THAT THE A.O. HAS BASED HIS FINDING ONLY ON THE BASIS OF REPORT OF EXCISE A UTHORITY. AS REGARDS THE CONTENTION OF THE APPELLANT THAT NO OPPORTUNITY TO CROSS-EXAMINE WAS GIVEN I AM OF THE OPINION THAT IT WAS THE DUTY OF THE APPELLANT TO SUBSTANTIATE THE TRANSACTION PARTICULARLY LOOKING I NTO THE CLINCHING REPORT OF THE EXCISE AUTHORITY AND VARIOUS STATEMENTS OF T HE PARTIES CONCERNED. THESE WERE DUTY CONFRONTED TO THE APPELLANT AND HE WAS NOT PRECLUDED FROM PRODUCING THE PERSONS WITH WHOM HE ENTERED INT O THE TRANSACTIONS. THE ASSESSMENT IS MADE ON THE BASIS OF FACTS GATHER ED AND DULY CONFRONTED TO THE APPELLANT. LOOKING INTO THE FACTS OF THE CAS E IT IS ALSO HELD THAT BOOKS OF A/C ARE RIGHTLY REJECTED BY THE A.O. 5 4.4.1 AS REGARD THE ISSUE OF CENVAT THE A.O. HAS C ONTENDED THAT THE ASSESSEE HAS ITSELF REVERSED THE CENVAT CREDIT AMOU NTING TO RS. 1 67 122/- AVAILED ON PURCHASE SHOWN FROM M/S SHREE BALAJI ISP AT MGG DURING THE YEAR UNDER CONSIDERATION AND RS. 4 97 447/- AVAILED ON PURCHASES SHOWN FROM M/S ROHIT ISPAT (INDIA) DURING SUBSEQUENT ASSE SSMENT YEAR ADMITTEDLY BY CREDITING THE CENVAT ACCOUNTS AND DEB ITING THE PURCHASE ACCOUNTS THUS REDUCING ITS PROFIT TO THIS EXTENT. T HE EXCISE DUTY IS AN INDIRECT TAX LIABILITY AND ITS INCIDENCE IS ULTIMAT ELY ON THE CONSUMERS. WHEN RAW MATERIAL IS PURCHASED THE AMOUNT OF DUTY I NVOLVED IN THE PURCHASE INVOICES IS REDUCED FROM THE PURCHASE OF M ATERIAL AND SHOWN SEPARATELY AS EXCISE BALANCE AVAILABLE WITH THE PAR TY AND WHEN THE FINISHED GOODS ARE SOLD THE AMOUNT OF DUTY ON GOOD S SOLD IS TRANSFERRED UNDER THE HEAD EXCISE DUTY CONSUMED. THE DUTY ON GO ODS SOLD CAN BE PAID EITHER FROM THE BALANCE AVAILABLE AGAINST PURCHASES OF RAW MATERIAL OR THE DUTY IS PAID FROM THE P.L.A. ACCOUNT I.E. CASH DEPO SITED. OUT OF THE TOTAL LIABILITY OF EXCISE DUTY THE ASSESSEE REDUCES THE CENVAT AVAILABLE WITH IT IN ITS ACCOUNTS AND ONLY BALANCE AMOUNT OF EXCISE D UTY IS PAID BY THE ASSESSEE. IN THE CASE OF BOGUS PURCHASE THE MANUFACTURER WR ONGLY SHOWS AVAILABILITY OF CENVAT (ON SUCH BOGUS PURCHASES) AN D THEREFORE PAYS LESS EXCISE (BY THE AMOUNT OF CENVAT) THUS POCKETING THE BENEFIT EQUIVALENT TO CENVAT AMOUNT. IN THE INSTANT CASE ASSESSEE RECEIVED EXCISE DUTY ELEMENT ON ITS SALES FROM THE CUSTOMERS BUT PAID TO THE GOVERNMENT ONLY THAT AMOUNT WHICH REMAINED PAYABLE AFTER REDUCING THE CENVAT CR EDIT AVAILABLE WITH IT. THE CENVAT CREDIT TO THE EXTENT OF RS. 6 64 569/- ( 167122+497447) BEING BOGUS. IT IS CLEAR THAT THE ASSESSEE POCKETED THE PART OF EXCISE DUTY COLLECTED TO THIS EXTENT I.E. RS. 6 64 569/- (16712 2+497447). BOGUS PURCHASE TOOK PLACE DURING THE YEAR UNDER CO NSIDERATION HENCE BOGUS CENVAT CREDIT AMOUNTING TO RS. 1 67 12 2/- AND RS. 4 97 447/- ON SUCH BOGUS PURCHASES WOULD REPRESENT THE INCOME OF THE ASSESSEE FOR THIS ASSESSMENT YEAR ONLY. REVERSAL OF ENTRY IN EXC ISE RECORDS ON A SUBSEQUENT DATE IS ONLY A CONFIRMATION OF BOGUS CLA IM ALREADY AVAILED DURING THE YEAR OF ASSESSMENT. IT IS IMMATERIAL WHE THER THE REVERSAL HAS BEEN SHOWN IN THE EXCISE RECORDS OR FINANCIAL ACCOU NTS DURING THIS YEAR OR NEXT YEAR. THE FACT WOULD REMAIN THAT ASSESSEE ACTU ALLY DERIVED THE BENEFIT THE FIRST DAY IT MANUFACTURED AND SOLD THE GOODS AF TER BOOKING BOGUS PURCHASE. ACCORDINGLY CLAIM OF CENVAT ON BOGUS PUR CHASES REPRESENTS ASSESSES SUPPRESSED INCOME AND AS SUCH ADDITION ON LY ON THIS ACCOUNT WORKS OUT TO RS. 6 64 569/- (167122+497447) FOR WHI CH ASSESSEE WOULD ALSO BE LIABLE FOR PENALTY U/S 271(1)(C) OF THE INC OME TAX ACT. LOOKING INTO THE FACTS OF THE CASE I AM OF THE OP INION THAT THE ADDITION HAS BEEN RIGHTLY MADE BY THE A.O. THIS GRO UND OF APPEAL IS THEREFORE DISMISSED. HOWEVER THIS ISSUE IS CONSID ERED IN PARA 4.4.3. 6 4.4.2 AS REGARDS INFLATION IN THE PRICE THE APPELL ANT IN HIS DETAILED SUBMISSION HAS SUBMITTED THAT THE ASSESSEES PURCHA SE FROM M/S ROHIT ISPAT AND M/S BALAJI ISPAT WAS INCLUSIVE OF CANVAT AND THE AVERATE NET (EXCLUSIVE OF CANVAT) PURCHASE RATE WAS RS. 17 842/ - PER MATRIC TON IN CASE OF M/S ROHIT ISPAT AND RS. 17 313/- IN CASE OF M/S BALAJI ISPAT. ON THE OTHER HAND THE AVERAGE PURCHASE PRICE FROM THIRD P ARTIES IS RS. 17 868/- PMT. THE A.O. HAS NOT REBUTTED THIS SUBMISSION OF T HE APPELLANT. THEREFORE I FIND FORCE IN THE ARGUMENT OF THE APPELLANT. THE A.O. HAS HIMSELF CONTENDED THAT THE APPELLANT HAS MADE PURCHASES FRO M THE GREY MARKET TO AVOID CENVAT THEREFORE COMPARISON IF ANY HAS TO B E MADE EXCLUDING THE DUTY PORTION. THIS GROUND IS HOWEVER CONSIDERED IN PARA 4.4.3. 4.4.3 AS REGARDS ESTIMATION OF PROFIT IT IS SEEN THAT IN THIS YEAR THE G.P. IS 5.8% ON TURNOVER OF RS. 24.05 CRORE COMPARE D TO 4.61% IN THE LAST YEAR. NO COMPARABLE CASE HAVE BEEN CITED BY THE A.O . LOOKING INTO THE SUBMISSION AND FACTUAL MATRIX OF THE CASE IN MY OP INION THE MAIN INCENTIVE TO THE APPELLANT IN THE CASE IS CENVAT WH ICH IS ALREADY HELD AS LIABLE TO BE ADDED AS INCOME OF THE APPELLANT. HOWE VER IN THIS CASE THE ISSUE IS SUBSTITUTION OF BOGUS PURCHASE BY THE PURC HASES MADE FROM GREY MARKET AS CONTENDED IN THE ASSESSMENT ORDER. THEREF ORE THERE IS ALWAYS A POSSIBILITY OF EARNING SOME EXTRA AMOUNT ALSO ON TH ESE BOGUS TRANSACTIONS ENTERED INTO BY THE APPELLANT. LOOKING INTO THE ENT IRETY OF THE CASE THEREFORE I AM OF THE OPINION THAT NET ADDITION OF RS. 9 50 000/- IS JUSTIFIED IN THIS CASE AGAINST RS. 16 77 918/- MADE BY THE A. O. 6. I HAVE HEARD SHRI ASHWANI KUMAR LD. COUNSEL FOR THE ASSESSEE AND SHRI S.K. MITTAL THE LD. DR AT LENGTH AND HAVE ALSO PER USED THE MATERIALS AVAILABLE ON RECORD. 7. SHRI ASHWANI KUMAR LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HIMSELF HAS ACCEPTED THAT THE ASS ESSEE HAS DECLARED GP RATE OF 5.8% IN THE YEAR UNDER CONSIDERATION WHICH IS BETTE R THAN THE GP RATE OF 4.61% DECLARED IN IMMEDIATELY PRECEDING YEAR. HOWEVER T HE ASSESSING OFFICER ON THE BASIS OF SURMISES AND CONJECTURES REJECTED THE BOO KS OF ACCOUNT OF THE ASSESSEE DULY AUDITED U/S 44AB OF THE ACT AND FURTHER MADE A N ADDITION OF RS. 16 77 918/- TO THE RETURNED INCOME OF THE ASSESSEE BY ARBITRARILY ENHANCING GP RATE DECLARED BY THE ASSESSEE TO 6.50% AS AGAINST D ECLARED GP RATE OF 5.80% DUE TO REASON OF PURCHASES MADE BY ASSESSEE IN THE YEAR UNDER CONSIDERATION FROM M/S ROHIT ISPAT (INDIA) AND M/S SHREE BALAJI ISPAT ALLEGEDLY TREATING THE SAME TO 7 BE BOGUS PURCHASES ON THE BASIS OF INFORMATION FROM THE CENTRAL EXCISE AUTHORITIES AND FURTHER STATEMENTS RECORDED BY THE SAID AUTHORITIES OF THE MANAGEMENT OF THE COMPANY DURING THE COURSE OF ENQU IRY REGARDING THE SAID PURCHASES. SHRI ASHWANI KUMAR LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT ON APPEAL THE CIT(A) REDUCED THE ADDITION TO RS. 9 50 000/-. THE LD. CIT(A) ADMITTED THAT ASSESSING OFFICER HAS NOT CITED ANY C OMPARABLE CASES WHILE APPLYING AN ADHOC GP RATE OF 6.50% AS AGAINST 5.80% SHOWN BY THE ASSESSEE ON TURNOVER OF RS. 24.05 CRORES. SHRI ASHWANI KUMAR L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD. COMMISSIONER HAS SUSTAINED THE A DDITION OF RS. 9 50 000/- WITHOUT ANY BASIS. THE LD. CIT(A) HAS OBSERVED THA T THERE IS ALWAYS A POSSIBILITY OF EARNING OF SOME EXTRA AMOUNT ALSO ON BOGUS TRANSACTION ENTERED INTO BY THE ASSESSEE BUT THERE IS NO SUPPORTING EVI DENCE ON RECORD TO JUSTIFY THE ADDITION SUSTAINED BY THE CIT(A). ALTERNATIVELY SH RI ASHIWANI KUMAR LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITIO N SUSTAINED BY THE CIT(A) IS ON HIGHER SIDE PARTICULARLY WHEN THE AUTHORITIES B ELOW HAVE FAILED TO CITE ANY COMPARABLE CASE. THE LD. CIT(A) ALSO APPLIED AN AD HOC GP RATE WHILE SUSTAINING THE ADDITION OF RS. 9 50 000/-. 8. I FIND SOME SUBSTANCE IN THE ABOVE SUBMISSIONS O F SHRI ASHWANI KUMAR LD. COUNSEL FOR THE ASSESSEE. IN MY OPINION THERE SHOULD BE SOME BASIS FOR ADOPTING GP RATE. IN THE INSTANT CASE BOTH THE AUT HORITIES BELOW HAVE ACCEPTED THAT THE GP RATE DECLARED BY THE ASSESSEE IN THIS Y EAR IS BETTER THAN THE IMMEDIATELY PRECEDING YEAR BUT THEY HAVE NOT ASSIGN ED ANY COGENT REASON WHILE APPLYING DIFFERENT GP RATES. AT THE SAME TIME I O BSERVED THAT THERE ARE JUSTIFIABLE GROUNDS FOR REJECTING THE BOOKS OF ACCO UNTS MAINTAINED BY THE ASSESSEE. THE ASSESSEE HAS FAILED TO CONTROVERT THE FINDINGS OF THE LOWER AUTHORITIES GIVEN IN RESPECT OF REJECTION OF BOOKS OF ACCOUNT. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE I AM OF THE OPINION THAT THE ADDITION SUSTAINED BY LD. CIT(A) APPEARS TO BE ON H IGHER SIDE AND THEREFORE TO 8 MEET THE ENDS OF JUSTICE I THINK IT PROPER TO REDU CE THE ADDITION TO RS. 3 LAKHS. THUS THE ASSESSEE GETS A FURTHER RELIEF OF RS. 6 5 0 000/-. 9. IN THE RESULT THE APPEAL IS ALLOWED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON 27.04.2015 SD/- (H.L.KARWA) VICE PRESIDENT DATED : 27 TH APRIL 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR