2016 (7) TMI 954

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....ar 2010-11 is completed by the Deputy Commissioner of Income Tax, Circle-4(1), Cochin after making an addition of Rs. 1,75,00,000/- to the returned income and the Commissioner of Income Tax (Appeals)has reduced the addition of Rs. 39,83,347/-. 2. The Commissioner of Income Tax(Appeals) has gone wrong in estimating the addition to the Gross profit at 0.44% on Rs. 90,53,06,364/- instead of Rs. 59,45,76,475/- which is the real turnover of the appellant for the assessment year. For the above reasons and the other arguments those may be put forward at the time of appeal hearing, the appellant may request to cancel the addition of Rs. 39,83,347/- to the income returned. 3. The Revenue has raised the following grounds of appea....

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....f gross profit on the basis of average percentage for the assessment years 2009-10, 2010-11 and 2011-12 which was 16.94% as compared to 16.50% declared by the assessee and accordingly, he sustained 0.44% applied to the gross turnover of Rs. 90,53,06,363/- which works out to Rs. 39,83,347/-. The assessee as well as the revenue are in appeal before us against the order of the Ld. CIT(A). 6. The Ld. Counsel for the assessee argued that there is no dispute to the invoking the provisions of section 145(3) of the Act. The only dispute is with regard to the estimation and the Ld. Counsel for the assessee has submitted certain items on which no profit element is involved which are to the tune of Rs. 31,07,29,889/ which includes the following:- ....

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....ly, Revenue's appeal is dismissed. 10. However, the Ld CIT(A) has discarded the said estimation made by the Assessing Officer and has gone into estimation of the income of the assessee on the basis of average gross profit of three years as under:- Asst. Year Gross Turnover Gross Profit % of G.P. Average %age 2009-10 62,34,40,558 11,43,65,379 18.34%   2010-11 90,53,06,363 14,99,85,294 16.5% 16.94% 2011-12 80,38,25,083 12,81,03,397 16%   Out of the average gross profit of 16.94%, if the gross profit declared by the assessee at 16.50% is reduced, the difference comes to 0.44% which has been directed by the Ld. CIT(A) to adopt on the total turnover. While estimating the....