TMI Blog2016 (2) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... fabric supplied as an export requires the international standards of material and size. Merely depending upon the domestic requirements cannot be the threshold of questioning the proper GP Rate adopted by the assessee. In view of this the assessee’s contentions sustain - Decided in favour of assessee - I.T.A .No.-1210/Del/2011 - - - Dated:- 15-1-2016 - SHRI INTURI RAMA RAO ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. K. Sampath, Adv. For The Respondent : Sh. Raman Kant Garg, Sr. DR. ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against order dated 1/12/2010 passed by Ld. CIT(A) XXVIII, New Delhi for the A. Y 2004-05. 2. The grounds of appeal are as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld.CIT(A) Commissioner of Income Tax Appeals_XXVIII was not justified in holding that the assessee failed to justify the reasonableness of the payments made to persons specified u/s 40(a) (2b) in terms of Section 40A(2a). 3. The assessee is proprietor of M/s Alankar Creations which is an exporter of Readymade Garments. According to Assessee, apart from business which was not yielding any profit, prompting the assessee to forego deduction available u/s. 80HHC, the assessee also has income from finance operations, property and investment income. Capital gain as well as loss has also been admitte don sale of investments. The concern assessee company is located in rented premises which happened to be the premises of M/s Aakriti Creations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of ₹ 4,23,98,624/- only. The other payments made to the company for various services are as under:- i. Rent for using premises 2,40,000 ii Electricity Charges 2,40,000 iii Salary of staff provided 2,40,000 iv Maintenance charges 1,20,000 v. Security Services. 1,20,000 5. Another payment of ₹ 76,150/- towards Exhibition Charges had been paid to M/s RTF Promoters Builder Pvt. Ltd., another closely held company of the assessee. While fabrication c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sharp disparity in the resultant G.P with the over G.P rate of 10.24% obtaining in the year under review as well as not able to identify any particular export order which may have resulted in a loss or nominal profit so as to marginalize the overall profit scenario. The Assessing Officer further observed that the Costing Sheet of the first Costing Sheet was analyzed to demonstrate that excessive quantity of fabric and consumables was claimed so as to lower the incidence of gross profit. In respect of 1052 pieces of Boys Pants , the total length of fabric claimed consumed in the Costing Sheet measures 1497.25 meters. 7. The Assessing Officer was not satisfied with the explanation given by the assessee and thus rejected the trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k registers which are also duly audited. The assessee completes books of accounts on two occasions before the Assessing Officer. The Assessing Officer has not taken into account. Books of accounts maintained by the assessee in the regular course of business the same is not proper on behalf of the Assessing Officer the nonexamination of books of accounts amounts to denied of the opportunity to the assessee to substantiate his claims in the support of the books of accounts return in the normal course of business. The assessee has maintained complete books of accounts return in the normal course of business including stock registers, the complete details of the sales, purchases and the expenses was fully maintained by the assessee and were pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the DR that books of accounts were not produced before Assessing Officer was not correct. As relates to rejection of books of accounts maintained by the assessee by the Assessing Officer without assigning any proper reason is not proper. The Assessing Officer has not taken into account all the invoices, bills related to the export orders, which should have been taken into account by the Assessing Officer. The Ld. CIT(A) also failed to look into this aspect and without giving a practical reason has adopted 5% of GP rate that it is clear that the fabric supplied as an export requires the international standards of material and size. Merely depending upon the domestic requirements cannot be the threshold of questioning the proper GP Rate ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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