9911796707
TMI Blog2019 (10) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(Appeals) has taken the basis of lower Gross Profit/Net Profit rate. Except for the electricity units issue no other mistake has been pointed out in the books of account regularly maintained that audited. Except the submission of the assessee accepting the excess units of 22598 units and working out the unaccounted sales all the charges levelled against the assessee by both the lower authorities have no sound basis and they are moving here and there. Sometimes the un-metered units are taken as a basis and sometimes lower Gross Profit/Net Profit rate is taken as a basis to complete the addition even when books of account stands not rejected. Most addition for undisclosed Gross Profit at the average Gross Profit rate of 11.28% on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in confirming addition on account of Gross Profit despite the fact that no defects were found in the books of accounts produced during the course of assessment proceedings. It is prayed that addition of ₹ 15,85,372/- be deleted. 4. The appellant firm craves, leave to add or alter any of the grounds mentioned above. 3. Briefly stated facts as called out from the records are that the assessee is a partnership firm engaged in manufacturing of quarts silica. Income of ₹ 71,980/- declared in the Income Tax Return filed on 01.12.2007. Audit Report under section 44AB of the Income Tax Act furnished. Case selected for scrutiny through CASS followed by serving of notices under section 143(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusive proof of unaccounted production. However, the assessee could not justify the reasons for sharp decline in the G.P. as well as N.P. rate. This has led to the application of net profit rate on the basis of average profit rate shown by the appellant himself in the past several years. These facts have not been disputed by the appellant. In respect of allegation of theft of electricity, the assessee has filed one copy of court order delivered by Special Judge (Elec.) 3rd Addl. Session Judge, Godhra dated 20.02.2010. From the copy of judgment, it has been found that after surprise checking by MGVCL on detecting the unauthorized use of electricity by theft, one court case was filed by the Government against the partner of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Assessing Officer in his show cause notice dated 09.12.2010. In this connection, Assessing Officer has pointed to page 6 on which the assessee firm has explained that considering the calculation error made by MGVCL, the unaccounted production works out to only 2125 MT in excess on excess consumption of electricity (alleged theft) of 22598 units in the preceding para. It is also submitted that on page 4 of the assessment order, the Assessing Officer has discussed that further it has admitted in his reply at point no. vi) at page 6 that firm has consumed the electricity the addition can be made the average of gross profit and not of the entire sales at point no. vii) at page 6 it has accepted the average sale price at ₹ 905/- per MY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound of appeal is disallowed. 6. Now the assessee is in appeal before the Tribunal against the finding of the Ld. CIT(A) confirming the addition of ₹ 15,85,372/-. 7. Ld. Counsel for the assessee submitted that the AO has made the addition merely on the basis of the amount paid to the electricity department and the case against the assessee was not finalized. Further, books of account are audited and Ld. AO has not rejected the books of account before estimating the profits. Subsequently, the Ld. CIT(Appeals) finding is also in correct as the addition has been confirmed on the basis of low net profit rate whereas the Ld. AO made the addition for un-metered electricity expenses resulting into unacco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) The working of the excess unit as per the formula is only 22590 units. (v) The firm has filed a case against MGVCL and the hearing for the same is fixed on 19.12.2009. (vi) Assuming without admitting the firm has consumed the electricity the additions can be made the average of Gross Profit and not of the entire sales. (vii) The average sale price is only ₹ 905/- per M.T. and not 1323 per M.T. (viii) The average rate of Gross Profit is 8.87% per year and the average Gross Profit for last three years is 11.28%. (ix) The electricity consumption can be made a basis for production on account of various technical factors stated abov ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
