TaxTMI 
TaxTMI 
2022 (7) TMI 590
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....to the Rs. 367,87,13,883/- whereas his turnover is Rs. 61,64,321/- being the commission received. 6. The Learned Commissioner of Income-tax (Appeals) failed to admit that the Assessee has shown a Net profit of Rs. 10,98,098/- on a turnover of Rs. 367,87,13,883/- whereas his profit is Rs. 10,98,098/- on turnover of Rs. 61,64,321/-." 3. The assessee is engaged in the business of dealing in fresh meat and the animals are directly procured from shepherds. The shepherds from different states come to Delhi with their stock of animals and the assessee purchases the stock of animals from these shepherds. These animals are then slaughtered by the assessee at MCD Slaughter House situated at Ghazipur, Delhi. Pursuant to slaughtering, the carcass ar....
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....hase of Rs. 367 Cr., an amount of Rs. 8.13 Cr. has been made directly from one supplier namely, Mr. Munna and the remaining amounts through brokers, shepherds, nomads. The Ld. CIT(A) has examined the purchase invoice containing tag number and weight of the livestock units and came to the conclusion that the action of the Assessing Officer is legally valid. The Ld. CIT(A) held that the assessee is involved in dealing in negotiating with various kinds of people and since no interference is called in the best Judge assessment, confirmed the rejection of books of accounts thereby confirming the estimation of net profit of 2% determined by the AO. 9. Heard the arguments of both the parties and perused the material available on record. 10. The ....
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....ion what are the express terms of the particular contracts under consideration. Each transaction, therefore, requires to be examined with reference to its terms and conditions and no hard and fast rule can be laid down as to whether the agent is acting only as an agent or also as a principal. 4. The Board are advised that so far as kachha arahtias are concerned, the turnover does not include the sales effected on behalf of the principals and only the gross commission has to be considered for the purpose of section 44AB. But the position is different with regard to pacca arahtias. A pacca arahtia is not, in the proper sense of the word, an agent or even del credere agent. The relation between him and his constituent is substantially that b....
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....nto transaction and his interest is limited to the commission agent's charges and certain out of pocket expenses whereas a pacca arahtia has a personal interest of his own when he enters into a transaction. (7) In the event of any loss, the kachha arahtia is entitled to be indemnified by his principal as is not the case with pacca arahtia. 5. The above distinction between a kachha arahtia and pacca arahtia may also be relevant for determining the applicability of section 44AB in cases of other types of agents. In the case of agents whose position is similar to that of kachha arahtia, the turnover is only the commission and does not include the sales on behalf of the principals. In the case of agents of the type of pacca arahtia, on ....
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....ss commission has to be considered for the purpose of section 44AB. The submission of the learned counsel for the assessee was that the case of the assessee is one of kachha arahtia and not a pacca arahtia and, therefore, only gross commission has to be considered for the purpose of section 44AB of the Income-tax Act, 1961.... The CIT (Appeals) has excluded the adat receipt as well as interest receipt from the purview of turnover for the purpose of section 44AB. Relying on the clarifications given by the Board in its Circular No. 452, dated 17-3-1986, he has categorized the assessee as kachha arahtia and he has charged expenses incurred on such business which resulted in gross profit rate of 1.09 per cent. Therefore, it is very much relevan....