TMI Blog2015 (4) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... een verified by the excise department also. There is no discrepancy either in the quantity or in the value of sales made by the assessee - Addition has been made on the ground that there is steep fall in the gross profit rate as compared to the earlier years. The assessee s case was that, same was due to decrease in sales realization due to devaluation of foreign exchange along with increased in cost of production. The assessee s explanation regarding fall in foreign exchange has been not been accepted completely on the ground that the average fall of US $ was not much. This cannot be reason for rejecting the assessee s books and estimating the gross profit unless no discrepancy has been found either in the quantity in value of purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiated on the addition made on account of gross profit. The assessee had shown sales of ₹ 31,22,46,861/- which comprised of export sales of ₹ 31.20 crores. The gross profit was shown at ₹ 36,34,969/- which was 1.17%. The Assessing Officer noted that in the earlier years the gross profit shown by the assessee were as under:- A.Y. Total sales Gross Profit Gross profit (%) 2003-04 39,02,02,282 4,67,24,149 11.97 2002-03 35,00,71,469 4,14,22,279 11.83 2001-02 43,55,29,670 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings but was also during the penalty proceedings. Entire quantitative details of purchases were submitted in which no discrepancy was found in the course of the quantum proceedings. The entire purchases were fully verified by the Excise department because, the assessee has claimed rebate under the Central Excise. Further the GP addition has been reduced by the Ld. CIT(A) which shows that there is difference of opinion with regard to the quantification of addition. However, the Ld. AO levied the penalty on GP addition which was sustained at 7%. 5. The Ld. CIT(A) has deleted the penalty after observing and holding as under:- 4.2 There is no dispute that penalty is levied in respect of GP addition only which was reduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in the Ld. AR s written submissions divulges the correct state of law on concealment penalty. Apart therefrom, the latest decision of the Hon ble Supreme Court in the case of Reliance Petroproducts (323 ITR 158) should not lose sight which states that mere making a claim which is not sustainable in law, by itself will not amount to concealment. Even in the instant case, it is not a case of wrong claim but it is a case of pure estimation. No false purchase/sales/expenses etc. have been found. The Hon ble High Court of Punjab and Haryana had in the case of Harigopal Singh V. CIT (125Taxman 242) held that provisions of section 271(1)(c) Are not attracted to cases where income is assessed on estimate basis and additions are made therein on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has claimed rebate under the Central Excise, therefore, the said purchases have been verified by the excise department also. There is no discrepancy either in the quantity or in the value of sales made by the assessee. The addition has been made on the ground that there is steep fall in the gross profit rate as compared to the earlier years. The assessee s case was that, same was due to decrease in sales realization due to devaluation of foreign exchange along with increased in cost of production. The assessee s explanation regarding fall in foreign exchange has been not been accepted completely on the ground that the average fall of US $ was not much. This cannot be reason for rejecting the assessee s books and estimating the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
