TMI Blog2011 (10) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... For Tempo charges, the percentage in the present year is higher by 1.88% and if the same percentage is maintained, it will result into a disallowance of ₹ 4,46,976/- out of tempo charges. It will result into G.P. rate of 20.59%, which is higher than G.P. declared by the assessee in the assessment year 2003-04 of 17.22% and in assessment year 2004-05 of 19.91% but we find that in the written submissions of the learned AR of the assessee, it is requested that G. P. rate may be adopted at 21%. We accept this request and hold that in the present case. G. P. rate of 21% be adopted as against 18.70% declared by the assessee. It will result into an addition of 2.3% of Gross Receipt of ₹ 237,75,331/-. Hence, net addition will be of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) be set aside and that of the assessing officer be restored. 4. The brief facts of this issue are noted by the Ld. CIT(A) on pages 1 2 of his order which are reproduced below: The next three ground or appeal are related and are regarding disallowance of expense of ₹ 19,72,590/-. The AO observed that the appellant was engaged in the business of Cargo Transport services through Railway and as per the balance sheet, the loading expenses payable we're ₹ 5,65,040/-, tempo expenses payable were ₹ 15,00,070/- and unloading expenses payable were ₹ 5,65.015/-. The AO required the appellant to give details of date of payments, name address and confirmation of the parties to whom the payments were m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed the balance disallowance ofRs.13,72,590/-. Now, the assessee is in further appeal before us for the part disallowance confirmed by the Ld. CIT(A) whereas, the revenue is in appeal before us for the relief of ₹ 6 lacs allowed by the Ld. CIT(A). 6. Ld. D.R. for the revenue supported the assessment order whereas it was submitted by the Ld. A.R. for the assessee that in the present year, although there is slight fall in the GP to 18.70% as against GP of 19.90% in the preceding year, NP in the present year is the same as in the preceding year i.e. 2.33% as noted by the A.O. in para 3 of the assessment order. It is further submitted by him that the GP chart of the present year and earlier two years are available on page 1 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses are lower in the present year in percentage terms. For tempo charges also, if same percentage is maintained, then disallowance of only ₹ 4,46,976/- is called for. He submitted that disallowance to this extent may be confirmed in the present year or GP may be adopted at average G.P. of present year and earlier two years. 7. As against this, it was submitted by the Ld. D.R. that the GP rate in the preceding year after including the addition confirmed by the tribunal in that year should be adopted in the present year even if it is felt that the entire addition made by the A.O. is not justified. He also submitted that when books are rejected, G.P. rate should be applied as in last year after Tribunal order and there is no basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts are identical in the present year as compared to assessment year 2004-05, but one difference in facts is very important. This difference is that even when we consider the percentage of net expenses in assessment year 2004-05 to gross receipt after reducing the disallowance confirmed by the Tribunal and compare the same with percentage of expenses to gross receipt in the present year, the same is lower in percentage terms in the present year except for tempo charges, which is higher by 1.88%. Difference equal to 1.88% works out to ₹ 4,46,976/- only. We also find that when the Tribunal says that GP rate of 27.35% is not possible in this line of business, confirming of disallowance of ₹ 7,51,186/- in that year, which is resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do so, we find that percentage of expenses under two heads is below that of the preceding year. For Tempo charges, the percentage in the present year is higher by 1.88% and if the same percentage is maintained, it will result into a disallowance of ₹ 4,46,976/- out of tempo charges. It will result into G.P. rate of 20.59%, which is higher than G.P. declared by the assessee in the assessment year 2003-04 of 17.22% and in assessment year 2004-05 of 19.91% but we find that in the written submissions of the learned AR of the assessee, it is requested that G. P. rate may be adopted at 21%. We accept this request and hold that in the present case. G. P. rate of 21% be adopted as against 18.70% declared by the assessee. It will result into a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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