9911796707
TMI Blog2013 (12) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of Rs.51,29,470/- along with tax audit report in form No. 3CB and 3CD as required u/s 44AB of the Income Tax Act, 1961 (the Act. During the course of assessment proceedings, the AO noticed that the assessee has shown total turnover of Rs.25,23,61,534/- giving GP at the rate of 14.37% as against the total turnover of Rs.22,05,93,735/- at the GP rate of 16.04% as shown in the immediate preceding year. Thus, the AO observed that there is a reduction in the gross profit rate of 2.01% as compared to the preceding year. The AO asked the assessee to explain the reasons for fall in GP rate. On verification of books of account and discussion with the Authorized Representative of the assessee, the AO made an addition of Rs.12,61,810/- on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared on behalf of the Revenue and pointed out that all the manufacturing expenses were not verifiable and the addition at the GP rate of 0.5% of the total turnover of sales is made after discussion with the ld. AR of the assessee, therefore, the view taken by the ld. CIT(A) be upheld. 4. In rejoinder, the ld. AR of the assessee submitted that even if the addition is required to be sustained the same be restricted to Rs.5,00,000/- as has been restricted by the CIT(A) and confirmed by the Rajkot Bench of the Tribunal in the assessee's sister concern. 5. Having heard both the sides and carefully gone through the orders in respect Ground No.1 as well as the decision of the Rajkot Bench of the Tribunal in assessee's sister concern viz M/s New ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for non-submission of certain information in time. Looking to the above facts I request your honour delete the addition of Rs.1,98,026/- made on account of penal interest" 7. After considering all the facts and circumstances of the case and following the decision of the Hon'ble Supreme Court in the case of Prakash Cotton Mills reported in 201 ITR 684(SC), the ld.CIT(A) confirmed the disallowance of penal interest charges amounting to Rs.1,98,026/- on the ground that interest charged by the bank is not compensatory in nature. Aggrieved with the order of the ld. CIT(A), the assessee is in appeal before this Tribunal on the following ground: "2. The ld. CIT(A) has erred in law confirmed as penal interest on late ..... X X X X Extracts X X X X X X X X Extracts X X X X
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