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TMI Blog2016 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... have been filed by the assessee. Since common issues are involved in the captioned appeals, these were heard together and are being disposed of by this single consolidated order for the sake of convenience. 2. Common grounds have been taken by the Department in both these appeals (only difference in the amounts). The Grounds taken in ITA No. 1973/Mum/2011 for the A.Y. 2006-07, which is taken as lead case, read as under:- "(1) On the fact and in the circumstance of the case and in law the Ld. CIT(A) has erred in reducing the G.P from 30% to 15% considering the submission of copies of invoice of exports, indicating sales price, hand embroidery and job work charges and corresponding purchase as well as job work bills ignoring the fact that: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not furnished by the assessee, majority of purchases made by the assessee were unverifiable, embroidery charges/job work/processing fees could not be substantiated as the parties were untraceable, the payments were made by bearer cheques. The A.O. also observed that there were various discrepancies in the accounts of the assessee which the assessee was not able to reconcile. The A.O. accordingly estimated the gross profits of the year at the rate of 30% of the total sales, which worked out to Rs. 1,15,09,884/-as against the GP of Rs. 43,47,715/- shown by the assessee. Aggrieved by the decision of the A.O., the assessee carried the matter before the ld. CIT(A) and submitted its detailed submissions. The assessee contended that the twelve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 15.09 23 13.03.2006 22,54,169.08 12,39,579.60 7,62,930.00 2,51,659.48 11.16 27 27.03.2006 17,78,151.00 9,76,739.84 5,35,952.00 2,65,459.16 14.93 Based upon this chart, the ld. CIT(A) estimated the gross profit ratio @ 15% as against 30% adopted by the A.O. Aggrieved by the decision of the ld. CIT(A), the Revenue is in appeal before us. 3. The ld. D.R. submitted that the A.O. has rightly invoked the provisions of section 145(3) of the Act to verify the genuineness of the purchases made by the assessee but these parties did not turn up and hence there were several discrepancies in the transaction and the A.O. has rightly rejected the books of account. However, though the ld. CIT(A) upheld the action of A.O. in invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the working furnished by the assessee. Accordingly, we uphold the order of the ld. CIT(A) and dismiss the ground raised by the Revenue. 6. In ground No. 2 the Revenue is aggrieved by the decision of ld. CIT(A) in allowing the disallowance of foreign export commission of Rs. 38,09,985/- in A.Y. 2006-07 and Rs. 33.65 lacs in A.Y., 2007-08. 7. The assessee has debited an amount of Rs. 38,09,985/- in his P&L account as foreign export commission in A.Y. 2006-07 and Rs. 33.65 lacs in A.Y. 2007-08. The entire amount is shown as liability under the head 'sundry creditors'. The A.O. asked the assessee to furnish the details of the expenses along with confirmation and relevant invoices, reasonableness of such commission and details of payment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee held that the Agent, Sinar Mandiri who helps the assessee to know the buyer and also the fashion trend of different countries. Since the textile fabric which is highly fashion oriented and keeps on changing from time to time and is different in various countries, it is the foreign commission agent who guides the assessee on the colour, texture and design of items etc. to be exported. The payments were made through banking channel, which is on record. These payments were made as per the regulation of RBI. The ld. CIT(A), accordingly, concluded that it cannot be said that the foreign export commission claimed by the assessee was unverifiable and accordingly directed the A.O. to delete the same. Aggrieved by the order of the ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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