2013 (11) TMI 133

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... order-sheet entries at page 1 of the assessment order as under: 3.11.2009 Part details filed 11.11.2009 Part details filed 20.11.2009 Part details filed 3.12.2009 Part details filed 10.12.2009 Part details filed 14.12.2009 Part details filed 18.12.2009   Attended finalised the hearing but the authorised representative did not produce the books which were relied on by him. He observed that in the absence of books, the assessment was finalised on the basis of written submissions. He noted that the gross profit ratio was 18.49 percent and the net profit ratio was 0.71 percent He pointed out that the gross profit ratio and the net profit were very low as the retail trader generally allows 10....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r fact based. I am in total agreement with the contentions of the authorised representative. There is no case for estimation of net profit at 5 percent of net sales. The addition is hereby deleted." Being aggrieved with the order of the learned Commissioner of Incometax (Appeals), the Department is in appeal before us and has taken following grounds of appeal : "1. On the facts and circumstances of the case, the Commissioner of Income-tax (Appeals) erred in deleting the addition of Rs.17,48,874 made by the Assessing Officer on account of low net profit ratio. 2. Set aside the order of the Commissioner of Income-tax (Appeals) and restore the matter back to the Assessing Officer to reexamine the fresh evidence in a holistic manner." ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion made on account of low gross profit ratio. We have considered the rival submissions and have perused the record of the case. It is well-settled law that merely on the ground of low gross profit ratio, the addition to the assessee's returned income cannot be made. Even if, the assessee's profit and loss account is discarded by the Assessing Officer, it has to be examined whether the Assessing Officer adopted the rational basis for making the addition. In the present case, we find that the Assessing Officer merely referred to the discount of 10 percent offered by retailers on the printed price but did not demonstrate as to how that affected the gross profit declared by the assessee. He had not brought on record any comparable case, ....