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TMI Blog2023 (11) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Act and loss was accepted as such. Thus we are of the considered view that the first appellate authority has grossly erred in not considering the reasons for decline in the N.P. in true perspective. Trading account is quantified, books of account are audited. No error infirmity or defect has been pointed out. Therefore, the addition solely based on comparison with profit of immediately preceding A.Y, ignoring the profit of earlier years and subsequent A.Ys is uncalled for . We, therefore, set aside the findings of the ld. CIT(A) and direct the AO to delete the impugned addition. Appeal of assesseeallowed. - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER For the Appellant : Shri Gaurav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery shown with reference to preceding year. i. Monthly Excise Returns. j. Monthly purchases, consumption, production and sales details [quantity wise and amount wise]. k. Books of accounts with bills, vouchers and bank statements. 5. On receiving no plausible reply, the Assessing Officer again asked the assessee to furnish details. The assessee submitted details which were perused by the Assessing Officer. On perusal, it was noticed that during A.Y 2011-12, total revenue from operation was Rs. 61,88,75,098/- resulting into NP of Rs. 3,46,08,700/- with N.P. ratio of 5.59%. 6. The Assessing Officer further found that in the impugned A.Y i.e. 2012-13, the revenue from operation was Rs. 91,05,19,558/- with N.P. o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were no cash deposits as observed by the ld. CIT(A). But, in fact, there were cash withdrawals which are evident from the copy of bank statements. The ld. counsel for the assessee concluded by saying that both the authorities below have erred in making the impugned addition based upon the ratio of A.Y 2011-12. 12. The ld. DR strongly supported the findings of the Assessing Officer and read the operative part of the order of the ld. CIT(A). 13. We have carefully perused the orders of the authorities below. There is no dispute that there was a sharp decline in N.P. rate for the year under consideration when compared with the profit rate of A.Y. 2011-12. It is also not in dispute that the profit rate for the year under consideration is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immediately preceding A.Y and after completely ignoring the decline in the profit and closure of business in the subsequent A.Y. The N.P. ratio for A.Y 2013-14 is 0.32% which became loss of 0.73% in A.Y 2014-15, 19.57% in A.Y 2015-16, 86.70% in A.Y 2016-17 and finally the business was closed in A.Y 2018-19. 18. The assessment orders for A.Ys 2013-14 and 2014-15 are placed on record which assessments were made u/s 143(3) of the Act and loss was accepted as such. Considering the facts of the case in totality, we are of the considered view that the first appellate authority has grossly erred in not considering the reasons for decline in the N.P. in true perspective. 19. Trading account is quantified, books of account are audited. No err ..... X X X X Extracts X X X X X X X X Extracts X X X X
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