PRADEEP PARIKH, A.M. : - (1.) THE assessee is in appeal before us against the order of the learned CIT(A), dt. 12th March, 1994 for asst. yr. 1991-92. THE first ground relates to the sustenance of the trading addition of Rs. 70,587 and also enhancing the same by Rs. 10,29,494.
(2.) The assessee is a registered firm doing textile printing work on job work basis. The assessee had returned an income of Rs. 5,24,515 for the year under appeal. In the course of assessment proceedings, the AO took note of certain defects in the records maintained by the assessee. Accordingly the AO invoked the provisions of s. 145. He estimated the job receipts at Rs. 2,06,55,000 as against Rs. 2,06,22,420 declared by the assessee. On the estimated receipts the AO applied a G.P. rate of 10.25 per cent as against 9.92 per cent shown by the assessee and finally made an addition of Rs. 70,587. In the first appeal, the CIT(A) observed that the assessee had shown job work receipts less by Rs. 11,00,081 by entering bogus debit notes and hence, after adjusting the addition of Rs. 70,587 made by the AO, further added a sum of Rs. 10,29,494 to the total income.
(3.) SHRI N. M. Ranka, the learned counsel for the assessee, submitted that the assessee, doing only job work, maintains proper books of accounts and the same are duly audited by a Chartered Accountant. Further, by making addition to the extent of Rs. 11.00 lakhs, the G.P. rate is enhanced to 15 per cent which is too high when compared with the assessees own history. It was submitted that in earlier years as also in the immediate succeeding year the income of the assessee has been assessed at a G.P. rate lower than 11 per cent. Thus from this viewpoint also, SHRI Ranka submitted, the addition was unjustifiable.;