AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 435
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....on 19/03/2015 by Regd.Post AD [ RG 26683606 3 IN - as per evidence on record] which has been returned by the postal authorities with remarks "Left". Since no new address has been furnished by the assessee, therefore it is presumed that notice is duly served, hence the appeals were taken up for hearing in the absence of the assessee. 3. First, we take up the Revenue's appeal in ITA No.2454/Ahd/2011 for AY 2006-07. The Revenue has raised the following grounds of appeal:- 1. The Ld.Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in restricting the addition made to the extent of Rs. 14,78,543/- as against the addition of Rs. 50,00,000/- made by the Assessing Officer on account of G.P. 2. The Ld.Commissioner ....
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....irst ground is against in restricting the addition made to the extent of Rs. 14,78,543/-. The ld.Sr.DR supported the order of the AO and submitted that the ld.CIT(A) was not justified in deleting the addition. He submitted that the AO has pointed out that there was a steep fall in GP from 10.78% in the preceding year to 3.62% in the year under consideration. 5. We have heard the ld.Sr.DR, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A), after considering the submissions, has decided this issue by observing as under:- "4,4 Decision: I have carefully perused the assessment order and the written submission filed by the Id.AR of the appellant. The appellant has dispute....
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....ferent items out of which the main items were cables and wires, Insulated scrap and copper scrap. The profit margin in each item of scrap is different. (v) There is a huge increase in turnover as compared to previous year and, therefore, the G. P. rate was bound to go down. The turnover this year was Rs. 10.15 crore as against Rs. 2.16 crore in the last year. (vi) Since the appellant has dealt in different items of scrap, this year the G. P. ratio was not comparable with the preceding year. (vii) The appellant made sales on consignment to consignment basis, and therefore, yielded low G, P. (viii) The G. P, rate was higher in A. Y. 2005-06 (13.73%) on account of high G. P. rate in a single transaction. (ix) In respect of insulated....
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....ted scrap. The A. O, in his remand report has also pointed out that there Is a steep decline in respect of G. P. in the trading of insulated wires from 8.3% to 1.66% i.e. by about 7%. Similarly, there was a decline of G. P. of cables and wires (Mtrs.) by 2%. The overall G. P. rate shown by the appellant in the present year was 3.62% as against 10.78% in the preceding year. After considering the above facts, written submission by the appellant and the remand report of the A. O., I am of the opinion that the assessing Officer was not justified in making an estimated addition of Rs. 50 lacs. It would have been proper had the A. O. made analysis of various data / information in respect of sale of different varieties of scrap submitted by the a....
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.... for the current year is taken @ 5%. The appellant has already shown a G. P. rate of 1.66%. Accordingly, the addition @ 3.34% of the G. P. which works out to Rs. 12,81,410/- is sustained in respect of insulated scrap. The other major items of scrap which can be compared with the figures of previous year is cables and wires mtrs. There is a decline of about 2% in the present year. There is a force in the appellant's submission that the quality of scrap varies from year to year and it cannot be strictly compared with the earlier years. However, since the appellant has not been able to correctly furnish the. details of opening stock, closing stock and such other details has been mentioned by the A. O. in the assessment order, the G. P. sh....
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....ress of the persons to whom above commission was paid. It has been submitted by the appellant that the TDS has been made u/s. 194H and copies of Form 60A was also filed by him before the A. O. He has given complete details mentioning the Address, PAN and the amount of commission paid to 3 persons. The A. O. in his remand report has not given any comments on the information submitted by the appellant. Since, the appellant has given necessary details for verification of commission expenses such as name and address of the person, PAN, confirmation of the person as well as Form 16A which was issued to the person to whom the commission was paid, the A. O. was not justified in disallowing the commission. The addition made is accordingly deleted."....