TaxTMI 
TaxTMI 
2022 (3) TMI 520
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.... based on the ration of the decision of Hon'ble jurisdictional High Court of Gujarat in the case M/s. Vijay Protiens Ltd. vs. CIT (2015) 58 taxmann.com 44 (Guj.). 3. As transpires from the orders of the authorities below, assessment in the present case was framed ex-parte u/s. 144 of the Act since the assessee failed to respond and comply with various notices issued to it during assessment proceedings. Even, the show cause notice issued u/s.144 of the Act remained uncomplied with. While framing the exparte assessment, the A.O. rejected the book results of the assessee, declaring loss of Rs. 6,18,78,990/-, in the absence of supporting evidences as well as ledger account and primary books, and estimated the total income at 25% of the gross receipt of the assessee, resulting in income being assessed at Rs. 2,60,22,854/- . The order of the A.O. holding at Para 3 is as under: 3. The date of compliance was fixed on 26.10.2017, however, the assessee did not comply for the reasons best known to it. Thereafter, penalty u/s 271(l)(b) of the Act was also levied on the assessee on 24.11.2017. Despite of afore mentioned facts and notices issued, for the reasons best known to the assesse....
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....pts resulting into addition of Rs. 2,60,22, 854/-. To support this ground of appeal, the Ld AR has furnished written explanation stating that various details called for were also furnished during the course of the assessment proceedings vide letters dated 18.05.2016, 14.06.2017, 31.08.2017 & 18.10.2017. However, the said details have again been furnished during the course of the appellate proceedings as additional evidences. The details furnished consisted of comparison of various expenses, ledger account of 3 years in respect of the parties which had been claimed as bad debts, details of sundry creditors and ledger accounts of major expenses with sample supporting evidences. The submission of the appellant along with details as mentioned above was forwarded to the AO. The AO in the remand report had objected to the admission of additional evidences, but also commented upon the merits of the addition s made. I find that the assessment order itself reveals that 5 notices issued between 08.04.2016 to 24.07.2017 were returned unserved. Only one notice dated 17.10.2017 was served through e-mail. Under these circumstance, it is clear that appellant could not get sufficient opportunity t....
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....ate on total turnover of Rs. 10,40,91,4167- from trading of goods relying upon the decision of the Hon'ble Gujarat High Court in the case of M/s. Vijay Proteins Ltd. vs. CIT (2015) 58 taxmann.com 44 (Guj). The Ld. AR has strongly objected to application of 25% net profit rate on the basis of decision of the Hon'ble Jurisdictional High Court on the ground that in that case bogus purchases on fictitious purchase bills were claimed by the appellant and accordingly, 25% of the purchase price of bogus/inflated purchases was disallowed. Since, in the case of the appellant, issue under consideration is not of disallowance of bogus purchases, the decision of the Hon'ble High Court in the case of M/s. Vijay Proteins Ltd. (supra) is not applicable. The Ld. AR has also referred to the comparative gross profit and net profit for last 3 years which are as under: Sr. No. Assessment Year Gross Profit Net Profit 1. 2015-16 -3.82% -59.79% 2. 2014-15 2.00% 0.05% 3. 2013-14 4.53% 0.01% Average profit of last 2 years 3.27% 0.03% The gross profit rate and net profit rate as mentioned above are duly verifiable from the Tax Audit Report placed on record....
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....infirmity in the same. The Ld. CIT(A) has rejected the applicability of the ratio laid down by the Hon'ble Gujarat High Court in the case of M/s. Vijay Proteins Ltd. (supra) by pointing out that it was rendered in the background of the facts that there were bogus purchases made in the said case and accordingly 25% of the purchase price was disallowed as inflated/bogus purchases. The Ld. CIT(A) has accordingly distinguished the said case on facts stating that in the impugned case, it is not the estimation of bogus purchases but the estimation of net profits. The Ld. D.R. was unable to controvert the above. We therefore agree with the ld. CIT(A) that the decision in the case of M/s. Vijay Proteins Ltd. (supra) of the Hon'ble Gujarat High Court was not applicable to the facts of the present case. Even otherwise, we find that the Ld. CIT(A) has at length considered the facts of the case and arrived at a reasonable estimate, considering the past history of the assessee and the fact of huge bad debts having been written off in the impugned year. The Ld. CIT(A) has noted that the assessee has at an average returned profit of 0.03% in the preceding two years which is verifiable from the Ta....