2019 (11) TMI 261

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....ts of two partners having profit sharing ratio of 50% each. It filed its return of income on 30th September, 2010 declaring the total income at Rs. 34,16,570/-. The Assessing Officer, during the course of assessment proceedings, observed that the total turnover, GP and NP of the assessee for the impugned assessment year as well as the preceding two assessment years are as under:- A.Y. Total Turnover  Gross Profit Net Profit GP Ratio NP Ratio 2008-09 Rs. 7,97,95,635/- Rs. 97,04,256/- Rs. 9,36,512/- 12.16% 1.17% 2009-10 Rs. 9,23,59,949/- Rs. 1,18,02,909/- Rs. 24,63,904/- 12.78% 2.67% 2010-11 Rs. 19,01,48,128/- Rs. 1,56,30,176/- Rs. 34,01,565/- 8.22% 1.79% 3. Since the assessee was not maintaini....

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....he book results and addition of Rs. 86,70,755/-. She also upheld the various other additions made by the Assessing Officer on the ground that the probable personal use of telephone and motor car could not be ruled out and that the assessee could not bring any evidence to take a contrary view than the view taken by the Assessing Officer in respect of other additions. 4. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:- "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals)[(CIT(A)] is bad both in the eye of law and on facts. 2 (i) On the facts and circumstances of the case, the learned CIT(A) has erred....

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.... and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the disallowance of an amount of Rs. 3,22,582/- on account of business promotion expenses. (ii) The said disallowance has been confirmed despite the same having been made at an adhoc rate of 25% without there being any basis for the same. 8 (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the disallowance of an amount of Rs. 58,142/- being 10% of the car expenses. (ii) That the said disallowance has been confirmed despite the same having been made at an arbitrary rate of 10%, without there being any basis for the same. 9(i) On the facts and circumstances of the cas....

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....sessing Officer, we hold that the ld.CIT(A) was fully justified in upholding the action of the Assessing Officer in rejecting the book results and going for estimation of the profits. 6. Now, coming to the rate of profit to be adopted, we find the turnover of the assessee during the impugned year has gone up substantially. It has gone up to Rs. 19.01 crore as against Rs. 9.24 crore in the immediately preceding assessment year. When the turnover grows substantially, it is quite possible that the rate of GP and rate of NP will come down. A perusal of the results shown by the assessee for the impugned assessment year as well as the immediately preceding assessment years shows that the net profit in the impugned assessment year has been shown....