TaxTMI 
TaxTMI 
2015 (1) TMI 618
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.... according to the quality of timber. Almost all the purchases were from Singapore except few local purchases. It was further noticed that assessee had purchased different type/kind of timber for different rates according to the quality of the imported timber. But he had not mentioned the item wise quality/ kind of timber on the sale vouchers. He simply quoted imported timber in the column of particulars of timber sold instead of quoting the kind/ type of timber item wise on the sale vouchers and, thus, suppressed the amount of sales in the absence of specification of quality of timber sold in that manner. 2.1. After comparing the purchase vouchers/ sale vouchers, the AO concluded that the assessee was not reflecting the true picture of his gross profit. He pointed out that huge sales had been suppressed out by the assessee by not recording the narration of item wise quality of timber. After detailed consideration of bills/ vouchers for sale and purchase, the AO issued a detailed show cause notice, as reproduced from pages 3 to 9 of his order, to explain as to why the books of account be not rejected and gross profit rate of 4.90% i.e. on average basis that was prevailing in the ma....
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....profits are less than 2%. No evidence in support of this claim has been brought on record besides the fact that it is not going to make much effect in the G.P. declared by the appellant. The appellant also referred to some of the cases wherein G.P. claim to be declared from 1.88% to 3.63% and claimed that GP declared at 2.58% by him is not low. This plea of the appellant is not verifiable for want of relevant facts. 1.09. In view of the facts discussed above, GP @ 4% is held fair and reasonable as against 4.9% adopted by the AO and 2.50% declared by the appellant. The AO is, accordingly directed to work out the GP of the appellant and addition made by him is as such confirmed up to that extent only." 2.7. Being aggrieved with the order of ld. CIT(A), both the assessee and the department are in appeal before us. Respective grounds raised are as under: ITA no. 3590/Del/11: (Assessee's appeal): "1. That on the facts & in the circumstances of the case, the Ld. CIT(A) has erred on law & facts by confirming the imposition of section 145(2) and upholding rejection of books of accounts despite furnishing of requis....
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....bsp; (i) ITO Vs. Shri Krishan Kumar - ITA no. 3543/Del/2011, A.Y. 2007-08, dated 6-7-2012; and (ii) Jai Parkash Vs. ITO - ITA no. 3589/Del/2011, A.Y. 2007-08, dated 28-11-2013. 4. Ld. Counsel pointed out that in these two cases exactly on the same facts, using the same comparables for the same assessment year, in the case of individual, engaged in the same nature of business, the additions were made on which partial relief was given by the CIT(A), sustaining the G.P. rate of 4%. In the case of Shri Krishan Kumar (supra), the ITAT in paras 8 to 11 of its order has observed as under: 8. We have carefully considered the arguments of both the sides and perused the material placed before us. The Assessing Officer has given four comparable cases on page 6 of the assessment order. For ready reference, the same is reproduced below:- Name of Assessee Asstt. Year % Gross Profit Jai Parkash M/s ....
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....as accepted by the Revenue. In view of the totality of above facts, we do not find any justification for applicability of GP rate of 4.90%. The gross profit rate disclosed by the assessee at 3.63% is better as compared to earlier two years of assessee's case and also better than the comparable case of Sat Paul & Sons quoted by the Assessing Officer for AY 2007-08. In view of the above, we do not find any justification for sustaining the part of the trading addition by applying GP rate of 4%. The same is deleted. 4.1. In the case of Jai Parkash (supra), the ITAT in para 5 of its order has observed as under: 5. We have considered rival contentions and perused the material available on record. In our considered view the judgment of coordinate Bench in the case of Krishan Kumar (supra) in which assessee's own case has been considered as comparable and holding that thought average rate of g.p. in the case of assessee being 4.9% still, the g.p. rate of 3.61% earned in the case of Krishan Kumar is justifiable. The ratio of the judgment on the facts is applicable and proposition that assessee's g.p. may vary y....