TaxTMI 
TaxTMI 
2016 (1) TMI 533
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....the learned AR. The same is, therefore, dismissed. 3. Ground No.2 is against confirmation of addition of `31,12,074/- made by the Assessing Officer by not accepting the trading results and applying gross profit rate of 20% as against 13.90% declared by the assessee. 4. Briefly stated, the facts of the case are that the assessee is engaged in the trading of medical equipments and educational goods. During the year under consideration, the assessee declared gross profit of `70,89,542/- on gross turnover of `5.10 crores yielding GP rate of 13.90% as against the preceding year's turnover of `3.02 crores and GP rate of 22.94%. On being called upon to state reasons for the decline in the GP rate, the assessee could not furnish any specific reas....
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....on of closing stock, is unsubstantiated. 6. The ld. AR contended that the books of account were not rejected by the AO and as such he could not have resorted to application of an arbitrary GP rate. There is no weight in the argument advanced by the ld. AR. It is vivid from the assessment order that the AO has given specific reasons for not accepting the gross profit rate declared by the assessee, which was not backed by any worthwhile evidence. The AO has pointed out so many deficiencies in the books of account maintained by the assessee. His action in referring to such deficiencies and then rejecting the gross profit rate is a clear indicator of his implied point of view of not accepting the books of account. What is relevant to see is th....
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....bmitted that the learned first appellate authority failed to include the amount of excise duty in the cost of purchases of almirahs. On being called upon to invite our attention towards purchase invoices, the learned AR took us through pages 113 onwards of the paper book. On going through such invoices, it can be seen that the purchase of steel almirahs has been made by the assessee from M/s Chandigarh Industries and M/s A.M. Technologies. None of the invoices from these parties include any amount of excise duty which the assessee claims to have been ignored by the learned first appellate authority. When pointed out, he contended that M/s Chandigarh Industries omitted to include the amount of excise duty in the invoices but, later on, the a....
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....onal item of trading, being Almirahs, in respect of which again the average GP rate comes to 25.29%, we are inclined to go with the results of the preceding year. In our considered opinion, the AO was more than reasonable in applying the GP rate of 20% as against the last year's GP rate of 22.94%. We, therefore, uphold the view taken by the ld. CIT(A) in upholding the addition of `31.12 lakhs. This ground is not allowed. 10. Ground No.3 is against the confirmation of addition of commission amounting to `9,81,876/-. The facts apropos this ground are that the assessee claimed to have paid a sum of `14,14,252/- as commission to its directors and sister concern covered u/s 40A(2)(b) of the Act. On being called upon to justify such payment, the....