TaxTMI 
TaxTMI 
2016 (12) TMI 1630
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....tances of the case and in law the learned CIT(A) has erred in deleting the disallowance of Rs. 88,79,050/- made @ 15% of total purchase. 3. The grounds raised by the assessee in his cross-objection read as under:- 1. On appreciation of the facts and circumstances of the case, the Learned Commissioner of Income-tax (Appeals) has rightly deleted the disallowance of Rs. 88,79,050/- made @ 15% of total purchase. 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, the learned Commissioner of Income-tax (Appeals) ought not to have directed the learned assessing officer to adopt Net Profit at the rate of 2% ....
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....ith search assessments) similar cases were assessed during the calendar year 2011 wherein the assessing authorities considered all facts of the case which is very similar to the facts of the case of this case and have estimated 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. 5.3 The appellant had furnished quantitative details of purchases and stock along with the tax audit return and has disclosed a sum of Rs. 12,06,419/- as gross profit (G.P.) which works out to 2.00 % of the total turnover. On consideration of the nature of the business the assessing officer doubted the profitability of the trailing results of the appellant. As a result the AO completed....
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....ivity 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, iii) how-cost of the goods is determined, iv) modus-operandie of the trading activities, v) methods of accounting followed and vi) the Sales -Purchase ratio. I have also perused the copy of the assessment order passed by Dy. CIT. Central Circle - 3, Surat in the case of M/s. Paper Sales Corporation wherein the AO had made G.P. addition of 0.50% to 0.75%. The market rule in this trade is that as the turnover increases the G.P./N.P. declines marginally. Considering the case in totality and the nature of ....
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....or inflated purchase and has also not doubted the sales figure disclosed by the assessee. He has further given a finding that Paper Mill Association had fixed the price for purchases of waste-paper from the traders and, therefore, the scope of manipulated sales price was not established and there was no evidence to conclude that waster-paper supplier have higher gross margin on sales only because their purchases are from small type vendors. He has further given a finding that 15% margin of profit is not possible in the case of assessee. He has further given a finding that Central Circle Surat had completed the assessment of small traders by estimating the Gross Profit and had considered the gross profit rate between 0.5% to 0.75% on similar....