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TMI Blog2024 (10) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... nted in respect of business of manufacture of wafer farsan. As regards, the business of trading in edible oil, the contention of the Appellant that the Appellant had offered to tax gross profits at the rate of INR 5.6% which were higher than the average industry gross profit rate of 3.25% was not disputed by the Assessing Officer. Thus, no addition was warranted in the hand of the Appellant. Our view draws support from the decision of Mohommad Haji Adam Co. [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT ] We delete the addition made by the Assessing Officer. Ground raised by the Appellant is allowed. - Shri Amarjit Singh, Accountant Member And Shri Rahul Chaudhary, Judicial Member For the Appellant/Assessee : Shri Rahul Hakani For the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facturing business of wafers etc without appreciating that Asseseee was manufacturing wafers and trading in oil and in it's manufacturing business Assessee had declared a gross profit of 27% which was more than 22.5% and hence the addition of Rs 96,08,043/- may be deleted. 3) Without prejudice to above, the Ld CIT(A) erred in confirming addition of Rs 96,08,043/- being the difference between gross profit offered by Assessee and gross profit estimated by AO @ 22.5% on total turnover without appreciating that gross profit cannot be estimated on trading of oil and such estimation gives unrealistic gross profit on trading of oil and estimate of gross profit of 22.5% on turnover of oil may be deleted. 4) The appellant craves leave to add, am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied single rate of gross profit to entire turnover i.e. sale turnover of wafer/dry snacks and edible oil. The audited accounts of appellant contain details of break-up of turnover i.e. for wafer/snacks and edible oil separately and calculation of gross profit of both the businesses of appellant is attached for your honor's kind perusal. From above, it is crystal clear that appellant has offered higher rate of Gross Profit of 27.19%. on wafer against Learned A.O.'s estimation of 22.5%. Even in edible oil, appellant's margin is higher at 5.69% than industry average of 3 to 5%. Without prejudice to above Gross Profit offered by appellant was Rs. 5,02,59,014/- and not Rs. 4,84,84,653/- which is taken for calculating disallowance. Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciate that Appellants business consisted of (a) manufacture of wafer snacks and (b) trading in edible oil. While estimating gross profits the Assessing Officer had taken the gross profits applicable in the food industry which were relevant for the business of manufacturing wafer/snack and had incorrectly applied the same to the aggregate turnover of INR 25,81,89,761/- which were also included turnover of INR 9,27,19,200/- pertaining to business of trading in edible oil. It was submitted that no addition was warranted in relation to the business of manufacturing of wafer/snack as the Appellant had declared gross profit margin of 27.19% which were more than the gross profit margin of 22.5% estimated by the Assessing Officer. As regard the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded turnover from trading in edible oil business carrying lesser gross margin (to which higher estimated gross profit margin of 22.5% applicable to food manufacturing industry were applied by the Assessing Officer) the overall gross profits of INR 5,80,92,696/- determined by the Assessing Officer were inflated. Similarly, while computing gross profits margin offered to tax by the Appellant, the Assessing Officer adopted the figure of overall turnover and overall profits resulting in incorrect determination of gross profits offered to tax by the Appellant in respect of business of manufacture of wafer farsan. On perusal of the material on record, we find that the Appellant has offered to tax gross profits at the rate of around 27% which were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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