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2020 (4) TMI 262 - AT - Income TaxEstimation of income - Decline in gp - declaring less GP rate for the year under consideration in comparison to the preceding years - HELD THAT:- It is undisputed that the margin in trading of bullion is very less and 1% GP is considered as a reasonable prevailing margin. Thus, 99% of the export turnover can fetch only 1% margin being trading in bullion then in remaining 1.23% turnover of the assessee is representing the sale of jewellery. As per directions of the Bench the assessee has filed the details of exports from which it is clear that out of total turnover ₹ 53.56 Crore the turnover of trading in bullion is ₹ 52.96 Core and the turnover from sale of jewllery is ₹ 6,00,000/-. When around 99% of the turnover of the assessee is from trading of bullion and purchases of bullion made from the Corporation Bank then the GP declared by the assessee at 1.39% is reasonable. The rejection of books of account would not be ifso facto result an addition if the assessee has declalred the profit in line with the prevailing profit in the trade /industry or in line with the past history of the assessee. In the case in hand when the assessee has declared GP at 1.39% of total turnover of ₹ 53.56 Cores out of which about 53 Core turnover is consisting of export of bullion. Thus when almost all the turnover of the assessee is an export of bullion then the margin/GP declared by the assessee at 1.39% is in the line with the profits prevailing in this trade. Neither the AO nor the ld. CIT(A) has appreciated this fact that about 99% of the turnover of the assessee is from trading in bullion, therefore, the addition made by the AO and sustained by the ld. CIT(A) is not justified and the same is deleted. - Decided in favour of assessee.
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