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2016 (5) TMI 1288 - AT - Income TaxAddition restricted at 2% of turnover - Held that:- We find that the ld.CIT(A) while deciding the issue in favour of assessee has given a finding that though the AO has doubted the purchases but has not brought on record any instance of bogus or inflated purchase and has also not doubted the sales figure disclosed by the assessee. He has further given a finding that Paper Mill Association had fixed the price for purchases of waste-paper from the traders and, therefore, the scope of manipulated sales price was not established and there was no evidence to conclude that waster-paper supplier have higher gross margin on sales only because their purchases are from small type vendors. He has further given a finding that 15% margin of profit is not possible in the case of assessee. He has further given a finding that Central Circle Surat had completed the assessment of small traders by estimating the Gross Profit and had considered the gross profit rate between 0.5% to 0.75% on similar facts as that of assessee. He thereafter after considering the Gross Profit and Net Profit ratio shown by the assessee, estimated the Net Profit at 2% as against 1.10% disclosed by the assessee.. Before us, Revenue has not brought any material on record to controvert the findings of ld.CIT(A). Looking to the totality of the facts of the present case, we do not see any reason to interfere with the order of the ld.CIT(A). Thus, this ground of Revenue is dismissed. Unexplained sundry creditors - Held that:- We find that the ld.CIT(A) while deleting the addition has given a finding that the credit balance pertains to three companies and during subsequent year, the money was paid to the vendors. He has further given a finding that it is not the case of unexplained credit, but a case of trade balance/credits at the end of the financial year. Before us, Revenue has not brought any material to controvert the findings of the ld.CIT(A). We therefore find no reason to interfere with the order of ld.CIT(A). Thus, this ground of Revenue is also dismissed.
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