9911796707
TMI Blog2015 (12) TMI 1407X X X X Extracts X X X X X X X X Extracts X X X X ..... 008-09 and 2009-10 respectively. Further there were certain differences in the closing balances of certain parties. The assessee has also debited brokerage of Rs. 24,50,000/- in the Profit & Loss Account. No agreement in respect of brokerage paid has been produced and the major brokerage has been paid to close relatives/family members specified under section 40A(2)(b) of the I.T.Act. No details regarding the services rendered by the brokers could be submitted. The Assessing Officer on this basis and relying on various case laws rejected the books of accounts under section 145(3) of the Income Tax Act, 1961 and estimated Gross Profit @12.5% of the turnover. 3. Further, the assessee had made payment of Rs. 51,945/- under the head advertisement and publicity expenses which exceeded Rs. 20,000/- paid in a day and Rs. 50,000/- paid in a year. Therefore, the Assessing Officer was of the view that the same were liable to tax deduction at source under section 194C of the Act. In view of this invoking the provisions of section 40(a)(ia) the Assessing Officer made disallowance of Rs. 51,945/-. 4. The assessee went into appeal before the CIT(A) and made detailed submissions against the acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ults u/s 145(3). 2. In facts and circumstances of the case and in law, the ld. CIT(A) has erred in relying upon the trading results of earlier year to estimate the net profit, ignoring the fact that each year has to be assessed on its merits which has been done by the AO and, therefore, the previous assessment results cannot be relied upon to estimate the profit in the current assessment year. 3. In the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in directing the AO to apply the G.P rate of 11.5% instead of 12.50% without appreciating the fact that other assessee dealing in the same business had shown higher G.P rate than the assessee. 4. It is prayed that the order of Ld. CIT(A) be set aside and that of the AO restored. 5. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard and finally disposed." Wherein the assessee has raised the following grounds. "1. The assessee is partnership firm running the business of manufacturing of Harvester Combines and its parts. The books of accounts of the assessee has been wrongly rejected by invoking the provisions of section 145(3) of the I.t. Act, 1961 and the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Year i.e., Assessment Year 2009-10 the assessment was completed under section 143(3) and an addition of Rs,30,000/- only was made in the trading results declared by the assessee. After taking into account this addition of Rs. 30,000/-, Gross Profit rate of 11.11% was accepted by the Assessing Officer. The Copy of the assessment order for the Assessment Year 2009-10 was also filed before the CIT(A). It was further submitted that the A.O. has wrongly based his estimation on the basis of Gross Profit rate declared in the Assessment Year 2008-09. Since, there was an increase of Rs. 10.61 crores in the turnover of the year under consideration as compared to Assessment Year 2008-09. It was also explained that increase in turnover has been achieved by reducing the sale rate of goods sold and margin of profits thereon. Small decrease of 0.69% as compared to the Assessment Year 2008-09 stands well explained by steep increase of 10.61 crores in sales during the year under consideration. It was also submitted that since department has accepted the Gross Profit rate of 11.11% in the immediate preceding assessment. There is no reason for making such estimation during the relevant assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Year 2008-09. As regards comparable cases cited by the Assessing Officer the appellant has given submission in this regard during the course of assessment proceedings as reproduced by the Assessing Officer in the Asstt. order. During the course of assessment proceeding as well as during appellate proceeding, appellant further referred to some other cases where gross profit rate is little lower. The appellant has also submitted additional evidence under Rule 46A producing few photocopies of bills contending that M/s Preet Agro Industries are purchasing engines at lower cost directly from the manufacturer. However, submitting only a few copies of such bills do not justify the fall in margin as the appellant itself in earlier years has shown higher margin and the appellant failed to show that the facts were different in that year. Therefore, the additional evidence submitted has no relevance and is not acceptable. Looking into entirety of the facts and circumstances of the case, I am of the opinion that in this case since the appellant has himself shown gross profit of 11.28% in the Assessment Year 2008-09. The gross profit rate of 11.5% may be taken for this year compared ..... X X X X Extracts X X X X X X X X Extracts X X X X
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