Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Income Tax Officer Vapi Ward-2, Vapi Versus Sh. Lalit Garg (HUF)

Disallowance of purchase on adhoc basis - gp determination - Held that:- We find that the ld.CIT(A) while granting partial relief to the assessee has noted that assessee is trader of wastepaper and purchaser of waster-paper and assessee purchases it from small time vendors and in turn the waste-paper is supplied to the paper-mills. He has further given a finding that the purchase price of waste-paper is fixed by the Gujarat Paper Mills Association and the waste-paper traders have VAT registratio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al Circle Surat had estimated the Gross Profit and enhanced the rate between 0.5% to 0.75%. Considering the totality of the facts, he has given a finding that 15% margin in the trading business is not possible and thereafter he considered that the Net Profit rate could be between 2 to 3% and thereafter estimated the Net Profit rate at 3% as against 2.68% shown by the assessee. Before us, neither the Revenue nor the assessee has placed any material on record to controvert the findings of ld.CIT(A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

relevant facts as culled out from the materials on record are as under:- 2.1. Assessee is a HUF which is stated to be engaged in the business of trading of waste-paper. Assessee filed its return of income for AY 2010-11 on 06/08/2010 declaring total income of ₹ 8,02,130/-. The case was selected for scrutiny and thereafter assessment was framed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") vide order dated 01/03/2013 and the total income was deter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he other hand, Assessee has raised following ground in its cross objection:- 1. On appreciation of facts and circumstances of the case and law, the learned Commissioner of Income tax (Appeals) had rightly deleted the disallowance of ₹ 49,40,034/- made @15% of total purchases. 2. It is therefore prayed that the order of the Learned Commissioner of Income tax (Appeals) be upheld to the above extent. 3. On appreciation of the facts and circumstances of the case and interpretation of law, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

objection are inter-connected, therefore the same are considered together. 3. During the course of assessment proceedings, on verifying the purchases from the details furnished by the assessee, AO noticed that the purchase vouchers were prima-facie unverifiable because there was no names and addresses of the parties from whom the purchases were made, there was no signatures of the parties in the vouchers, all the payments were made in cash. AO was therefore of the view that purchases were not f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e written submission. The appellant is a trader ion waste paper and is purchasing the waste paper and other similar scraps from small time vendors who are popularly known as raddiwallas. Such raddiwallas collect waste items from difference locations in and around Vapi Industrial town and finally sold the waste paper so collected to the middleman traders like the appellant. The appellant purchase such waste paper collected on a day to day basis, accumulate the same in quantities and thereafter se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e paper mills Association fixed up such purchase price to have a level playing field for the members by ensuring uniform impact of cost of raw materials i.e. waste paper. The waste paper traders like the appellant obtain VAT registration and other required government permissions and disclose to the VAT Department their turnover and other details on a regular basis through mandatory VAT returns and the VAT authorities make an assessment under the VAT law and determine the tax liability on an year .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not brought on record any instance of waste paper purchases made by the customers of the applicant (Paper Mills) as being found to be bogus on inflated. The AO has not disputed the nature of business carried out by the appellant and has not pointed out any instance of tax planning by any paper mills specifically to form an opinion as such. The appellant is a trader in an unorganized sector, the AO has not doubted the sales figure disclosed by the appellant. Considering that the paper mills asso .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1 wherein, the assessment authorities considered all facts of the case which is very similar to the facts of the case of this and have estimate the gross profit and made an addition of 0.5% to 0.75% of the turnover as income on the basis of same facts and issues in dispute. 4.4 The appellant had furnished quantitative details of purchases and stock along with the tax audit return and has disclose a sum of ₹ 17,36,499/- as gross profit (G.P.), which works out to 7% of total turnover. On con .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ers like the appellant should comply with the provisions of the income-tax law in maintenance of books of account and other particulars required for the purposes of assessment. In this case, considering the peculiar nature of the business and the modus operandi required for carrying out the business, the inference have to be derived from all the facts in entirety. Admittedly, there is no dispute as regards the quantum of sales. There is no possibility of waste paper traders like the appellant ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

traders by estimating the gross profit and enhanced the rate between 0.5% to '0.75% being the facts similar1 to the appellant. This indicates that this trading activity is high volume low margin business. I have also spared my thoughts on various aspects of the business activities such as (i) what are the items covered under this trade.,(ii) source of waste papers and other items traded by the appellant, (ii) how cost of the goods is determined,(iv) modus operand! of the trading activities, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cumstances, for the sake of justice and fairness, I consider the N.P. rat should apply between 2-3 % depending on the turnover. As mentioned earlier, higher the turnover, the GP/NP is lower. In this case, the appellant had shown GP/NP at 2.35%/2.68% respectively. Thus, applying the general rules, in my considered view, the N.P. is estimated at 3% as against 2,.68% disclosed by the appellant will meet the justice. Accordingly, the AO is directed to adopt NP at the rate 3% for determining the taxa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

identical facts, the Coordinate Bench (ITAT A Bench Ahmedabad) of Tribunal in other cases have estimated the Net Profit at 2%. He placed on record the copy of the decision in the case of ITO vs. Shri Gurfran A.Chaudhari in ITA No.1360 & 1552/Ahd/2012 for AY 2006-07, order dated 11/03/2016 and decision of ITAT B Bench Ahmedabad in the case of ITO vs. Tayab Yunus Barudgar order dated 27/05/2016. 5. We have heard the rival submissions, perused the material available on record and gone through t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ls Association and the waste-paper traders have VAT registration and other required permissions and it files the details of turnover, etc. through the VAT returns before the VAT authorities. He has further noted that AO has not doubted the purchases made by the assessee nor has got on record any instance of waste-paper purchases made by the assessee found to be bogus or inflated. He has further noted that assessee had furnished quantitative details of purchase and stock alongwith tax audit repor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d any material on record to controvert the findings of ld.CIT(A). We further find that on identical issue, in the case of ITO vs. Tayab Yunus Barudgar (ITA No.1351/Ahd/2012 and CO No.155/2012) vide order dated 27/05/2016 the Coordinate Bench of Tribunal had dismissed the ground of Revenue by holding as under:- 4. We have heard the Ld.DR, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) while deciding the issue in favour of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Forum: Rent a cab operator

Highlight: In view of amendment made u/s 132A of the Income Tax Act, 1961 by Finance Act of 2017, the 'reason to believe' or 'reason to suspect', as the case may be, shall not be disclosed to any person or any authority or the Appellate Tribunal, SC dismissed the appeal of the assessee

Highlight: Validity of Assessment Order - period of limitation u/s 153 (2A) is applicable even if the entire order was not set aside but matter was remanded back for for limited aspects with directions - HC

News: Note ban was a shake-up, achieved its main objectives

Notification: Amendments in the notification No.5/2017- Integrated Tax (Rate) dated the 28th June, 2017.

Highlight: Levying interest u/s 234C - interest is to be charged on the returned income and not on assessed income.

Highlight: Accrual of income - sale of right to develop and sell incentive FSI under LOI - till the conditions of LOI are fulfilled transfer is not complete and income does not accrue to the assessee

Highlight: TPA - determination of ALP - TP adjustment by applying Bright Line Test (BLT) is not sustainable on protective basis having no statutory mandate.

Highlight: Safeguard Duty - Advance License Scheme - as there is no exemption from safeguard duty leviable under Section 8C, which is imposed on the goods imported from China, the importer has to pay safeguard duty

Highlight: Manufacture - process of cutting of waste plastic container - Such plastic containers before and after cutting are nothing but waste / scrap - Not a manufacturing activity as no new product emerges.

News: NITI Aayog and Govt. of Assam organizes workshop on health sector reforms in Guwahati; launches SATH- Sustainable Action for Transforming Human Capital

Notification: Seeks to amend notification no. 5/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding restriction of refund on corduroy fabrics

Notification: Seeks to amend notification no. 2/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst exemptions

Forum: GSTR 3B Rectification

Notification: seeks to exempt Skimmed milk powder, or concentrated milk

Notification: Seeks to amend notification no. 2/2017- integrated tax(rate) dated 28.06.2017 to give effect to GST council decisions regarding GST exemptions.

Forum: 3B mistake

Notification: Seeks to amend notification no. 1/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates

Notification: Seeks to amend notification no. 1/2017- integrated tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates.

Forum: GST - TRAN1 - filed - Data uploaded with Remarks Processed with Error - Not coming in Electronic credit ledger - need suggession guidance

News: Notification Issued For GST Actionable Claim On Branded Food Products

Highlight: Classification printed computer stationary/manifold Business Forms - to be classified under Chapter Heading 4820.00 or under Chapter Heading 4901.90 - items like A4 sheets, advertisement and job card to be classified under Chapter 49

Forum: GST Invoice

Article: Websites of Government Departments need lot of improvement. We are noticing detoriations in them for example, case of website of ITAT.

Article: RCM Applicability to persons not liable to get registered us 23(1)

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

News: GST Refund - Blockage of Working Capital of Exporters - earlier also there was a normal blockage of funds for a period of 5-6 months at least

News: Clarification about Transition Credit - ₹ 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on 30th June, 2017 - claim of credit of ₹ 65,000 crore is not unexpected

Article: 20 Things You must know about E Way Bills in GST Law

Article: MISTAKES IN DRAFTING

Forum: Duty Drawback- Urgent

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Circular: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg.

News: GST implementation smoother than expected: Jaitley

Forum: Due date of Filing TRAN-1



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version