TaxTMI 
TaxTMI 
2017 (2) TMI 559
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....nue. The appellant is the Proprietor of M/s Bahubali Traders a proprietorship firm and the assessee which derives its income from trading of menthol disclosed turn-over of Rs. 1,16,38,55,100/- with gross profit of 0.08% and net profit of 0.007% in its income-tax return for the year 2012-13. Assessing officer did not accept the gross profit return of the assessee which according to him was much lower in comparison to other assessees engaged in the same business in the same area. The relevant extract of the order passed by the Assessment Officer reads as under:- " The comparative Chart of following assessee carrying out same business in same financial year is as under:- Sl. no. Name Turnover GP% NP% 1. Shri Rakesh Kumar, Prop. ....
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.... out of business income. Therefore, Rs. 1,60,056/- is added under the head ''Low Withdrawal'. (Addition of Rs. 1,60,056). The income of the assessee is computed as under:- Total income as per Return Rs.6,78,633/- Add: (i) (ii) As discussed in para 4 As discussed in para 5 Rs.66,54,087/- Rs. 1,60,056/- Rs. 68,14,143/- Total Income Or Rs.74,92,776/- Rs.74,92,780/- Accordingly assessment is completed at total income of Rs. 74,92,780/- charge interest u/s 234B & 234C of the I.T. Act, 1961. Notice of demand and challan is issued. Penalty notice u/s 271(1)(c) are being issued separately." Being aggrieved the appellant filed an appeal before the....
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....the appellant's case and substantially better book-results shown by other traders in the same line of business. Accordingly, addition to the extent of Rs. Rs. 11,63,855/- @ 0.1% of the turnover of Rs. 1,16,38,55,100-) is hereby confirmed." The Revenue assailed the order of Commissioner of Income-tax (Appeals) before the Income-tax Appellate Tribunal, Lucknow by filing an appeal which has been allowed on 5th July 2016. The Income-tax Appellate Tribunal has concurred with the Assessment by the assessing officer and has quashed the order of Commissioner of Income-tax (Appeals). The relevant extract of the order passed by the Income-tax Appellate Tribunal is being reproduced as under:- "We have considered the rival submissions, going thr....
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.... is traded almost based on multi commodity exchange of India Ltd and hence the rates fluctuate depending upon the market conditions and the profit margin in the trade is nominal and even in cases cited by the Assessing Officer as exemplars, the profit rates is very low. The Tribunal did not consider the relevant issue nor recorded any cogent reason for disagreeing with the finding recorded by the Commissioner of Income-tax (Appeals). Having heard the learned counsel for the appellant and perused the record, we find that though the petitioner at the relevant time was in the first year of his business but his turn over was far more than the turnover of other players in the market, as is evident from the details mentioned in the order of the ....