TaxTMI 
TaxTMI 
2019 (11) TMI 1300
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....,234 made by the Ld. A.O. for alleged low gross profit in Indore Branch of the appellant as compared to Ujjain Head office. 2. That the addition in respect of enhancement of gross profit of Rs. 4,29,234 by taking it as 3.5% instead of 2.2% shown in the books of the Indore Branch of the appellant has been made without any finding about the correctness or completeness of the books as required u/s 145(3) and thus the entire addition is 3. That there is no justification either in law or on facts for the Ld. CIT(A) to sustain the addition of Rs. 4,06,142 made by the Ld. A.O. for alleged excess commission paid by Indore branch as compared to Ujjain Head Office. 4. That the addition of Rs. 4,06,142 as alleged excess comm....
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....he coordinate bench of this Tribunal rendered in the case of Mayank Kumar Natwarlal Soni Vs. Addl. CIT (2019) 111 Taxmann.com 6 (Ahmedabad-Trib). The Ld. Counsel also placed reliance on the judgement of Hon'ble Madras High Couirt rendered in the case of PCIT Chennai Vs. Marg Ltd. (2017) 84 taxmann.com 52. 5. The Ld. D.R. opposed these submissions and supported the order of the A.O. 6. I have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. Undisputedly, the A.O. has not rejected the books of accounts and estimated the gross profit. The basis for disturbing the gross profit by the A.O. is that the assessee has disclosed gross profit at Ujjain Office higher ....
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....aturally the traders would fetch desired margins. This is the reason why it is expected from the A.O. that he should consider the factor that might influence the margins before making a fair estimation of the profit. In the present case, the A.O. did not make necessary enquiry, which would have enabled him to make a fair estimation of profit. Hence, action of the A.O. cannot be sustained. The A.O. is therefore directed to delete the addition. 7. Ground Nos.3 & 4 are in respect of disallowance of excess commission. Ld. Sr. Counsel to the assessee submitted that the disallowance of commission is purely based on conjectures and surmises. No adverse material is gathered to contradict the claim of the assessee. He submitted that the A.O. fail....
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.... (2.42% of sale) Rs. 12,25,195/- (3.62% of sale) 20,04,331/- Discount allowed 3. G.P. 20,06,755/- (6.22%) Rs. 7,44,802/- (2.22%) 27,51,557/- From the table given above, it is seen that on the sale of Ujjain head office the total discount allowed is Rs. 7,79,136/-, which constitutes 2.22% of the sale and thereafter G.P. comes at 6.22%. But in the case of Indore branch office on the sale the total discount allowed is Rs. 12,25,195/- which constitutes 3.62% of the total sale and thereafter G.P. comes at 2.22%. It mean firstly that the assessee has allowed more discount in the Indore branch office. Even then the sale of Indore branch office and Ujjain head office is show....