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TMI Blog2021 (11) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... t on facts and in law, the learned CIT(A) has grievously erred in confirming the addition of Rs. 38,40,763/- made on account of low gross profit. 3. The appellant craves leave to add, alter, amend any ground of appeal." 2. Brief facts of the case are that the assessee is engaged in the business of dying and printing of job work basis. The assessee filed its return of income for the A.Y. 2013-14 on 28.09.2013 declaring Nil income after setting of business loss of Rs. 4,39,921/- against the income from other sources and carry forwarded of business loss and unabsorbed depreciation of Rs. 29,97,290/- and Rs. 47,98,831/- respectively. The case was selected for scrutiny. During the assessment, the assessing officer (AO) noted that assessee has turnover of Rs. 19,87,17,900/- and gross profit of Rs. 1,66,47,052/-. The assessee worked out Gross Profit @ 8.38%. In earlier years, i.e. in A.Y. 2009-10, the assessee has shown Gross Profit @10.44%. In the said year, the gross profit declared by assessee was not accepted by the AO and estimated gross profit @13.69%, which were confirmed by the ld. CIT(A). The AO on the basis of aforesaid observation issued show cause notice as to why the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration the turnover of the assessee was more than Rs. 19 crore. It is a matter of fact that on increase of turnover, the incidental cost increase automatically, thereby possibility of reduction of Gross Profit. The assessee has shown sufficient and good margin profit and no addition in absence of identifying any specific defect in the books of the assessee, was warranted. The ld AR also filed his short written synopsis. In the written synopsis the ld AR for the assessee specifically mentioned that in AY 2011-12, the Tribunal while estimating GP @ 10.31% held that estimation is based on peculiar facts and should not be taken as bench mark in subsequent years. The ld.AR for the assessee prayed for deleting the entire Gross Profit additions. To support all his submissions the ld AR for the assessee also relied on the following decisions; * Dhakeshwari Cotton Mills Ltd Vs CIT ( 26 ITR 775 SC), * Pandit Brothers Vs CIT (26 ITR 159 Punj), * Jhandumal Tarachand Rice Mills Vs CIT ( 73 ITR 192). 4. On the other hand, the ld.Sr.DR for the Revenue supported the order of Lower Authorities. The ld.Sr.DR further submits that during the year under consideration the AO in the show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al) erred in dismissing the appeal before him without giving proper opportunity to appellant which is against the natural justice hence required to be set a side.." 8. At the outset of hearing, the ld.AR of the assessee submits that the ld. CIT(A) passed the ex-parte order without discussing the merit of the case and without giving fair and adequate opportunity of hearing. The assessee sought adjournment and one occasion. Adjournment was allowed, however, no further date was communicated to the assessee. The ld.CIT(A), passed the order in ex-parte proceedings without discussing the merit of the case. The assessee has good case on merit and is likely to succeed if the assessee is given one more opportunity to contest the hearing before the ld.CIT(A). The ld.AR for the assessee undertook to be vigilant in attending the hearing before first appellate authority. 9. On the other hand, the Sr. DR for the Revenue submits that the assessee was given ample opportunity, but the assessee failed to comply with the notice issued by the ld. CIT(A). The ld. CIT(A) left with no option, except to proceed to decide the issue and in absence of any evidence or explanation affirm the action of AO. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld.CIT(A)-1, Surat may be setaside and that of the Assessing Officer's order may be restored." 13. Brief facts of the case are that the AO while passing the assessment order under section 143(3) on 16.02.2015, rejected the books of accounts and made Gross Profit addition by estimating Gross Profit @10.31 % thereby making addition of Rs. 1,51,01,078/-. The AO also made disallowance under section 36(va) r.w.s 2(24)(x) of the Act of Rs. 2,55,909/-. On appeal before the ld. CIT(A), the additions were upheld. The AO levied penalty under section 271(1)(c) of the Act on the Gross Profit estimated addition only. The AO levied penalty @100% tax sought to be evaded. The AO levied penalty of Rs. 51,32,856/- in his order dated 29.03.2017 passed under section 271(1)(c). 14. On appeal before the ld. CIT(A), the penalty order was deleted. The ld.CIT(A) deleting the order by following the order of Appellate Authority in earlier years i.e. 2010-11 and 2011-12, wherein the penalty was levied on estimating similar Gross Profit additions, thus, aggrieved by the order of ld.CIT(A), the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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