9911796707
TMI Blog2022 (7) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... the net profit @ 0.22% in the instant set of facts. In the result, the appeal of the assessee is dismissed. - ITA No. 222/Rjt/2017 - - - Dated:- 1-7-2022 - Shri Waseem Ahmed , Accountant Member And Shri Siddhartha Nautiyal , Judicial Member Assessee by : None Revenue by : Shri Sanjeev Jain , CIT - D. R. ORDER PER BENCH : - This assessee s appeal for A.Y. 2012-13, arises from order of the CIT(A)-3, Rajkot dated 03-05-2017, in proceedings under section 143(3) rws 144 of the Income Tax Act, 1961; in short the Act . 2. The assessee has taken the following grounds of appeal:- [1] That the Ld.CIT(A)-3,Rajkot has erred in law and on facts in upholding the decision of Ld. DCIT, Circle Gandhidham in applying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncrease in turnover and reduction in sale prices to fulfill commitments, the appellant company had incurred loss in business transactions with the parties not related to the appellant company and there being no motive of making losses, books of account of the company and losses incurred by the company be accepted. [7] The appellant further contends that loss returned by the company be allowed and additions made by estimating net profits estimated by Ld. DCIT, Circle Gandhidham and as confirmed by Ld. CIT(A)-3, Rajkot be deleted. [8] In view of the above and others that may urged at the time of hearing, it is prayed that - (i) The addition made by Ld. DCIT, Circle Gandhidham and addition retained by Ld. CIT(A)-3, Rajkot to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit to ₹ 1,87,42,378/-. While passing the order, Ld. CIT(Appeals) made the following observations: 5.11 I do agree with the A.O. that in the given circumstances, i.e, loss in intra-group transactions happening in the year end, the book results are not convincing. The Ld. AR has very vocally argued that the sale transactions which have been reported to sales tax and other departments cannot be dubted merely because they are lower than the purchase price. He had cited the compulsion of fulfillment of contractual obligation for incurring such transactions. Even if one accepts that appellant was bound to sell the goods at a predetermined price which was lower than the existing market price at that time, appellant could have bough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e NP ratio estimated later will be applied on the entire business receipts to re-compute the estimate business profit. The decision already taken by me in respect of assessment year 2010-11 regarding fallacy of the action of taking NP rate at 7% without any rhyme and reason holds good for this year also. Interestingly in the assessment order segment the AO had trifurcated the business results GP of only 2.56% was found by AO in the segment of Depot sale! AO has not doubted result of this segment and therefore he has no reason to apply hugely excessive 7% of GP ratio on the direct trading segment. The total assessed business income by the assessment order is 54.66 crores which is around 6.4% of the total gross turnover 851.92 crores. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s challenging the estimation of net profit made by the Ld. CIT(Appeals). The short question before us is with regard to the action of Ld. CIT(Appeals) in upholding the rejection of books of accounts by Ld. CIT(Appeals) and reduction in the estimation of net profits by applying the rate of 0.22% to the total turnover of the assessee as opposed to 7% applied by the AO. We note that similar issue was decided by ITAT Rajkot bench in assessee s own case for assessment year 2010-11, whereby on similar facts, the ITAT upheld the action of Ld. CIT(Appeals) in rejecting the books of the assessee and also upheld the action of Ld. CIT(Appeals) in estimating the appropriate net profit ratio @ 0.5% relying on the result of the assessee for the preceding ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
