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TMI Blog2020 (12) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... account, it gives a Gross Profit of 60.67 lakhs which is 3.8% of the sales declared by the assessee for the year under consideration and since the same is more than the GP rate of 3.5% adopted by the CIT(A), we find merit in the contention of the assessee that this is not a fit case to make any trading addition and the trading addition made by the Assessing Officer and sustained by the ld. CIT(A) is liable to be deleted. This vital aspect relating to the mistake committed by the assessee by treating the income disclosed during the course of survey to profit loss account instead of trading account as now highlighted by Assessee was not brought to the notice of CIT(A) and even the ld. CIT(A) failed to take note on the same while sustaining t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long with the return for the entire previous year ending on 31.03.2013 however reflected G.P. rate of 1.6% only. He noted on the basis of the comparison of trading account prepared for the pre-survey period during the course of survey and the trading account prepared by the assessee for the entire year that there was a gross loss for the post-survey period and the sale shown by the assessee was more than the purchases. He, therefore, required the assessee to offer its explanation in the matter. In reply, it was submitted on behalf of the assessee that the trading account prepared for the pre-survey period during the course of survey was tentative one and it was prepared by taking Gross Profit rate of 4.09% as declared by the assessee in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide an order dated 05.02.2016. 3. Against the order passed by the Assessing Officer u/s 143(3) of the Act, an appeal was preferred by the assessee before the ld. CIT(A) challenging the trading addition of ₹ 39,60,651/- made by the Assessing Officer and after considering the submissions made by the assessee as well as the relevant material available on record, the ld. CIT(A) restricted the said trading addition to ₹ 30,18,904/- for the following reasons given in paragraph no.8.4 of his impugned order :- "8.4 As regards estimation of gross profit percentage, it has been noticed that in the 3 preceding years the gross profit percentage of the business of the appellant was 3.17%, 5.89% and 4.89%, average of which works out to 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of survey affecting the trading result however was wrongly credited by the assessee to the profit & loss account. He has submitted that if the said amount of ₹ 35 lakhs is added to the Gross Profit of ₹ 25.67 lakhs as appearing in the trading account of the assessee, the Gross Profit would be ₹ 60.67 lakhs giving a GP rate of 3.80% on the total sales of ₹ 15.96 crores. He contended that since this GP rate is actually more than the GP rate of 3.5% adopted by the ld. CIT(A) by taking into consideration all the relevant facts of the case including especially the average GP rate declared by the assessee for the immediately preceding years, there is no case of making any trading addition and even the trad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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