2016 (7) TMI 1259

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....he case in restricting the disallowances to 0.1% i.e. Rs. 11,63,855/- of total turnover as against the addition of Rs. 66,54,087/- made at the rate of 0.65% of GP by Assessing Officer after rejecting the books of accounts of the assessee, without giving any basis or justification." 3. During the course of assessment proceedings, the assessee a trader in Menthol was asked to explain the reasons for short fall in GP & NP. The assessee submitted before the AO that the GP and NP rates of firm during the year were 0.07% and 0.06% respectively. The assessee further stated that the business of menthol oil trading and supply was mainly expanded in the District of Barabanki and Sitapur and that the supply was done in some other districts as well.....

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....mpugned addition:- S.No. Name Turnover GP% NP% 1. Sh. Rakesh Kumar, Prop, Jai Matadi Tranders 22,55,23,666/- 1.00% 0.45% 2. Sh. Prem Kishor, Prop Verma Trading Company 21,26,22,016/- 1.04% 0.40% 3. Sh. Arvind Kumar Jain, Prop. Bahu Bali Trading Company 1,16,38,55,100/- .08% 0.007% 4. Sh. Balram Gupta, Prop. Gupta Traders 45,45,83,627/- 0.56% 0.11% 5. Sh. Kapoor Bab, Prop. Gupta Suppliers 36,42,97,790/- 0.96% 0.25% 6. Sh.Sachin Jain Prop. M/s Parswa Traders, Fatehpur, Barabanki 2,12,12,49,125/- 0.30% 0.10%   4. We noted that the assessee has shown GP rate of 0.08% which was much lower in comprised of average GP rate taken of si....

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....as the other parties chosen by the Ld. AO. In view of these peculiar situations applicable to the appellant, the adoption of average GP of 0.65% by the Ld. Assessing Officer cannot be sustained more so, when the Assessing Officer has not recorded any defects in terms in the books of accounts maintained by the appellant. However, the GP of 0.08% 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 sa....