TaxTMI 
TaxTMI 
2012 (3) TMI 139
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.... in law and against the facts of the case. 2. That the ld. CIT(A) has erred in upholding the orders of AO by sustaining the income of M/s Citizen Roadl ines @ 4.51% NP rate wi thout appreciating the facts that work has been done by own tankers and tankers hired f rom outside. 3. That the ld. CIT(A) has erred in adopting the Net Prof it @ 1.75% of gross turnover of M/s Aastha Trading Co. , ignoring the fact that the business of the f irm has doubled as compared to previous year and the sale of the molasses having lesser GP has increased manifold, without simi lar increase in sale of rice having more GP, coupled with the fact that the bank interest on working capital has increased almost to double. 4. That the ld. CIT(A) has e....
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....siness economics due to substantial increase in sales as several expenses of f ixed & semi f ixed nature would have not been increased in proportion of increase in sales. 3. The appel lant craves for leave to add or amend the grounds of appeal before the appeal is heard and disposed of f . 4. It is prayed that the order of ld. CIT(A) be set aside and that of the AO be restored." ITA No.373/Chd/2011 (Assessee's appeal) 4. In assessee's appeal, ground Nos. 1 & 6 are general in nature. Hence, need no separate adjudication. 5. In Ground No.2, the assessee contended that CIT(A) erred in upholding the orders of the AO by sustaining the income of M/s Citizen Roadl ines, estimated @ 4.51% NP rate, without appreciating the facts that ....
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.... the same cannot be uti l ized for any other purpose. The ld. 'AR' contended that the NP of 4.5% is on the higher side. It was further argued by the ld. 'AR' that in terms of Section 44AE of the Act, maximum income per truck is Rs.3500/- per month. Accordingly, the estimate made by the AO is on the higher side. Ld. CIT(A) rejected this l ine of contention raised by the assessee. Ld. CIT(A) observed that the estimate may be based on the trading results of the comparable cases or it may be based on the assessee's own history. The AO had computed the income of the assessee by applying average NP rate which was accepted by the assessee in the earl ier two years. Accordingly, the CIT(A) upheld the findings of the ld. AO. However, keeping in view....
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.... of NP of 2% stating that the turnover of the appel lant had doubled as compared to the previous year and it has been mentioned that the circumstances of the business are not comparable to the previous year. It was contended that gross profit of the appel lant had fal len to 4.75% during the year under appeal as compared to 7.26% during the year 2006-07, due to stif f competition and the turnover at more than double. Consequently, the resultant net profit has fal len from 1.92% in the assessment year 2006-07, to 0.93%, during 2007-08. Assessee also contended increase in the interest paid and justified net prof it shown by him. 8. The ld. CIT(A) reduced the net profit rate appl ied by the AO at 2% to 1.75%. However, having regard to the e....