TaxTMI 
TaxTMI 
2020 (12) TMI 718
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....3.11.2019, 18.02.2020 and 05.10.2020, neither the assessee nor its authorized representative appeared before the Tribunal on the above dates. As there is repeated non-compliance by the assessee, we are proceeding to dispose off this appeal after examining the materials available on record and after hearing the Ld. Departmental Representative (DR). 2. The grounds of appeal filed by the Revenue read as under : 1 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made without appreciating the fact that the assessee company failed to produce cogent evidences in support of its claim of sales returns of Rs. 10,54,65,987/- from M/s Conros Steels Pvt. Ltd. 2 Whether on the facts and....
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....the basis of "Accounting Standard-2" i.e. valuation of inventories on the basis of cost or market value whichever is lower. The AO noted that various other details called for were not filed. The AO further observed that most of the purchases were from M/s Krongner Impex Pvt. Ltd., Mankhurd, Mumbai and most of the sales were to Conros Steels Pvt. Ltd. As per the AO, the claim of loss was not justified since in the case of a trading concern, the goods purchased were sold immediately and there could not be any question of any defective goods. Further, the assessee had shown net sales of Rs. 16,44,42,191/- whereas, gross sales to Conros Steels Pvt. Ltd. was Rs. 18,00,00,000/-. If VAT of 5% was added to the gross value, it works out to Rs. 17,26....
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....,26,64,300/-. The appellant has reflected the sales net of VAT in its P & L account at Rs. 16,44,42,191/- Further, though the purchase order was of Rs. 18,00,00,000/-, the actual sales is somewhat lower, and the bill wise details of sales were furnished in support. Thus, there is no discrepancy as alleged by the assessing officer. The appellant has submitted that quality claims and discount, which should have been reflected in trading account, has erroneously been stated under administrative expenses. The nature of the item does indicate that the presentation was erroneous and should have been part of trading account. By not accepting the error, the Gross Profit in the trading account comes to an absurd 71%, which is obviously incorrect. ....
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....ile estimating the assessed income. The estimated gross profit addition is therefore deleted." 5. Before us, the Ld. DR submits that the assessee failed to file before the AO item-to-item purchase/sale with mapping of goods and discount allowed to each party and discount if any earned by it in such similar transactions. Therefore, it is stated by him that the AO has rightly rejected the claim of the assessee for discount allowed. Further, the Ld. DR states that the assessee failed to file before the AO copies of orders given by Conros Steels Pvt. Ltd. with specification of goods, copies of invoices issued by the assessee-company with specification of goods, correspondence made with Conros Steels Pvt. Ltd., copies of goods testing reports m....
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.....e. Rs. 16,44,42,191 (net) and the same is reflected as sales in the P&L account. The assessee has submitted the purchase order vide letter dated 30.03.2016 before the AO. There is merit in the contentions of the assessee that if quality claim of Rs. 10,54,65,987/- and the discount amounting to Rs. 1,07,85,617/- are taken to the trading account, where they rightly belong as per the accounting principles, then the rate of gross profit comes to 0.52% of sales which compares favourably with the normal rate of gross profit ranging from 0.1% to 0.5% in the assessee's business of trading in HR and CR coils/sheets and galvanized coils/sheets on wholesale basis. We further notice that similar level of gross profit has been shown by the assessee in....