TaxTMI 
TaxTMI 
2017 (2) TMI 559
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....kw/2015 relating to Assessment year 2012-13, allowing the appeal of the Revenue. 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....
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....offered is found satisfactory to the some extent. Therefore, keeping in view the standard of living of the assessee, his personal expenses is estimated at Rs. 2,16,000/-(Rs.18000 P.M. x 12) for the year under consideration. The balance amount of Rs. 1,60,056/-(216000-55,944) is hereby treated as withdrawal 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. 6....
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....n terms in the books of accounts maintained by the appellant. However, the GP of 0.080% shown by the appellant, does not appear reasonable and cannot, therefore, be upheld, being on an extremely low side. Accordingly, I am of the considered view that the interest of justice will be met, if a GP rate of 0.1% is adopted in the appellant's case looking to the peculiar situation prevalent in 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 Appell....
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....he genuineness and validity of the agreement between the appellant and M/s Nector was not doubted at any level therefore, the judgment of the Tribunal is not sustainable. The appellant's firm was new in the business and it was only first year of its business, therefore, it could not be compared to other players in the market. It is also contended that the Tribunal failed to appreciate that the commodity in question 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 reco....