TMI Blog2015 (11) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... er and as such ld. CIT(Appeals) was justified in holding that it was not possible that there would be no cost of goods produced/sold as done by the Assessing Officer. It is well settled law that the turnover of the assessee could not represent the profit of the assessee. In the turnover of the assessee, only part amount is represented as income of the assessee. The cost of the material sold should have been deducted from the turnover in order to arrive at the profit of the assessee. The ld. CIT(Appeals), therefore, on the total turnover of ₹ 43,05,319/- of Hot Mix material correctly directed to apply profit rate for the purpose of making addition, therefore, rest of the addition of ₹ 39,61,815/- was rightly deleted. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46/-. 3. The assessee challenged this addition before ld. CIT(Appeals) and written submission of the assessee is reproduced in the appellate order in which the assessee briefly explained that Assessing Officer made this addition wrongly after considering the entire value of sale of Hot Mix material of ₹ 43,06,319/- as income without deducting cost of material sold. The Assessing Officer should have applied the profit rate on the sale value of the material sold to ascertain the cost of material sold before working out the gross profit on sale of such Hot Mix material. It was submitted that Assessing Officer has made a wrong calculation whereas Assessing Officer should have worked out cost of the material sold to ascertain the gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire amount of material sales have been reduced from the gross profit which meant that the entire sales were representative of gross profit and there was no cost of materials sold. It is seen that the assessee had produced hot mix material from its plant for its contract work and the excess production was also sold to outside parties leading to turnover of ₹ 43,06,319/- on this account. It is not possible that there would be no cost of goods produced/sold as done by the Assessing Officer and the claim of the appellant in this regard is perfectly logical since the books of accounts had been rejected and have been confirmed accordingly, therefore the application of gross profit rate of 8% on the hot mix materials sold would be right cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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