J.K. Ranka, J. - (1.) This instant appeal under Sec. 260A of the Income Tax Act (for short 'the Act') is directed against the order dated 5.11.2014 passed by Division Bench of the ITAT, and is relevant for the assessment year 2003 -04.
(2.) Brief facts which can be noticed in the present appeal, are that the respondent -assessee is a Private Limited company and is deriving income by way of export of ready made garments. The assessee maintains closed and adjusted Books of Account and accounts are stated to be audited.
(3.) During the course of assessment proceedings, the Assessing Officer noticed that the Trading Results declared by the assessee were not proper and the Gross Profit rate had declined sharply from 28.14% to 16.22%. An explanation was sought, and it was narrated by the assessee that during the previous year, relevant to the year under appeal, the assessee had made 100% export of ready made garments, that it had purchased mostly Grey fabric, and after purchasing Grey fabric the same was got printed/processed from process houses/printers etc., incurring additional cost as compared to the immediately preceding assessment year, and it was further explained that the average cost per meter as compared to preceding year had increased sharply. Other factors were also narrated, however, the Assessing Officer was not satisfied with the explanation so offered and rejected the Books of Account under Sec. 145(3) of the Income Tax Act, 1961 (for short 'the Act') and applied a G.P. rate of 25% and made a Trading addition of Rs. 32,86,536/ -. Other additions were also made.;