TMI Blog2017 (9) TMI 1464X X X X Extracts X X X X X X X X Extracts X X X X ..... s account did not include certain expenses such as bardana, Jhonk, Mandi Fees and Purchase tax etc. Thus the action of the ld. CIT(A) for adopting the average GP rate of 10.58% shown by the comparable cases was not justified, particularly when, he had not also given any reason for not accepting the GP rate applied by the AO at 9%. Therefore, we modify the order of the ld. CIT(A) and direct the AO to apply the GP rate of 9% instead of 10.58% applied by the ld. CIT(A) and work out the addition, if any. - ITA No. 3460/Del/2017 - - - Dated:- 25-9-2017 - Sh. N. K. Saini, Accountant Member Assessee by : Sh. Piyush Kaushik, Adv Revenue by : Sh. T. Vasanthan, Sr. DR ORDER This is an appeal by the assessee against the order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or scrutiny. During the course of assessment proceeding, the AO noticed that the assessee had shown gross profit ratio of 3.55% on the total turnover of ₹ 4,09,56,553/- and net profit ratio of 0.06%. He also noticed that the other units engaged in the similar trade of the same vicinity had shown gross profit ratio hovering between 8% and 12%. The AO observed that the sugarcane purchased by the assessee was ₹ 20/- to ₹ 30/- per quintal higher than the purchases shown by the other similar units in the same vicinity. The AO pointed out that almost every page of the purchase register was tampered especially in the month of February and March 2013 in which the variation in the price of sugarcane was more. He also pointed out ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rage of 1.58% to the assessee. 5(F) The assessee has shown total gross receipts of ₹ 4,09,56,553/-. On applying GP @ 9%, the gross profit comes to ₹ 36,86,089/- while the assessee has shown a gross profit of ₹ 14,53,956/-. Thus the difference of ₹ 22,32,133/- (3686089-1453956) is treated as more gross profit earned by the assessee. The assessee in the profit and loss account has debited several expenses. Though in the absence of supporting documentary evidences these expenses are also unverifiable yet it is presumed that the assessee firm must incurred certain expenses As I have estimated gross profit rate of 9% hence no further disallowance has been made and giving the full expenditure booked in P L account an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Intt. Remu) 303100.00 993635.00 526830.00 436427.00 466009.00 Net profit (%) (Capital Intt. Remu.) 1.35% 2.02% 1.96% 1.15% 1.14% 6. However, the ld. CIT(A) did not agree with the submission of the assessee and enhanced the addition by ₹ 9,01,043/- by observing as under: I do not agree with the appellant's submission as above. He can either rely on one argument or the other which is either rely on the past history of his own or a comparative figures of the G.P. rate with other units in the vicin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ₹ 34,33,187/- i.e. 8.38% thus the addition will be of (10.58% - 8.38%) 2.20% and at this rate the extra profit would work out to be ₹ 9,01,043/- instead; of ₹ 22,32,133/-. The appellant gets relief to the extent of the balance amount. 7. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the AO after considering the facts that the assessee had incurred more expenses for purchase of the sugarcane in comparison to the comparable cases, applied the GP rate of 9% and the ld. CIT(A) also accepted this contention of the assessee that certain expenses were not included by the comparable cases. Therefore, the enhancement m ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
