TaxTMI 
TaxTMI 
2015 (8) TMI 114
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.... has erred in not considering the fact that the addition of Rs. 28,63,816/- on account of income from joint venture was made by the assessing officer for the reason that the assessee failed to prove satisfactorily the reason of variations in profit on some transactions and loss in respect of other transactions for the same commodities sold on same date to different parties which was purchased at same price. 2. On the facts & in the circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating that the assessing officer has applied average of maximum rate of profit on each item of goods traded on a single day to arrive at the correct income of the assessee from joint venture. 3. On the facts & in the circumstances o....
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.... profit margin. His detailed analysis has been incorporated from pages 5 to 10 of the assessment order. From the said analysis, he noted that the profit varied from 4.5% to 8.42% for a particular item and in another item, the profit varied from 13.4% to 19.6%. He also observed that the assessee has failed to prove satisfactorily, as goods were sold at a different rate of profit / loss on a single day out of goods purchased at the same price. Accordingly, he worked out the maximum rate of profit on a single day and applied the same to determine the profit on such sales. This was worked out at Rs. 28,63,816 as per the chart appearing at page 10 of the assessment order and was added to the income of the assessee. 3. Before the learned CIT(A....
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....e's detailed submissions in this regard have been incorporated by the CIT(A) from pages 7 to 19 of the appellate order. 4. The learned CIT(A), after considering the entire material and assessee's submissions, observed that the AO has not given any proper comment or rebuttal as to how the explanation given by the assessee before him regarding variation in the sale price is not correct. All the supporting documents like purchase bills, sale bills, vouchers / bills for expenses, stock registers giving complete quantitative details of goods purchased and sold were given before him. All the sales have been made through cheques only and thereafter without pointing out any specific defect either in the method of accounting or on the correctness....
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.... circumstances. The AO has clearly brought out date-wise, consignment-wise transactions and has analyzed the percentage of the profit. The factors which have been elaborated before the learned CIT(A) are only general in nature sans any specific instances. Thus, the addition made by the AO is based on proper analysis of the books of account and other material on record and therefore, should be confirmed. 6. On the other hand, the learned Counsel, reiterated the submissions made before the CIT(A) and submitted that one of the biggest factor in the fluctuation of the sale price was on account of fluctuation of foreign exchange rate, because all the items which have been sold were imported from various countries. The other main factor were t....
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.... or spot buyers etc., terms of credit, i.e., whether the assessee has received the payment immediately or after a credit period of few months, whether the sales are inclusive of excise duty or not and host of other factors taking into consideration commercial and market factors are relevant for determining the sale price. The AO cannot disturb the sales figure as mentioned in the sale bill and substitute with his own price without carrying out any inquiry from the buyers as to whether the sale prices as mentioned in the bills have been inflated or suppressed. Even the net profit margin of the assessee as compared to earlier years is also ranging between 7.88% and 8.37%. If the over all profit margin is taken into consideration, then there c....