2022 (11) TMI 412

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....appeals, the revenue has raised certain common grounds of appeals, certain facts are common in both the appeals, thus, both the appeals are clubbed, heard together and are decided by consolidate order to avoid the conflicting decision. For appreciation of fact, the appeal in ITA No. 315/Srt/2019 (ITO Vs M/s Clematis trading Co. Pvt. Ltd.) is treated as 'lead' case, wherein the revenue has raised following grounds of appeal: "1. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in granting relief to the assessee in reducing the gross profit rate at 0.5% as against at 3% estimated by the AO, without considering the facts and of the case in its entirety. 2. The ld. CIT(A) has erred in law and on ....

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....y nor furnished any books of account, bank statement, bills and vouchers, thus prevented the Assessing Officer to verify the correctness of books of account. The books of account of assesse was rejected under Section 145(3) and the Assessing Officer estimated 3% gross profit on the total turnover of Rs. 160.41 crores thereby making addition of Rs. 4.81 crores. 4. Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee stated that the Assessing Officer rejected the books of account and made addition on ad hoc basis. The books of assessee were duly audited. The assessee is a private limited company and are subjected to annual statutory audit under the provisio....

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....s, we do not find any justification for adjourning the case and decided to hear the submission of ld. Sr. DR for the revenue and to pass order on the basis of material available on record. 7. The ld. Sr. DR for the revenue submits that in assessee's own case for A.Y. 2013-14, similar addition was restricted to 1%. The assessee filed appeal before the Tribunal wherein the order of ld. CIT(A) was upheld in ITA No. 3156/Ahd/2016 dated 24/12/2021. The ld. Sr. DR submits that, though the Tribunal confirmed the similar addition @ 1% in assessee's own case for A.Y. 2013-14, yet he prayed to restore the additions made by Assessing Officer by setting aside the order of ld. CIT(A). The ld. Sr.DR also filed copy of decision in ITA No. 3156/Ahd/2016....

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....and truck/vehicle through which the goods were delivered. The AO noted that despite being number of opportunities, no details were furnished. No books of accounts was produced by the assessee. The AO recorded that in the similar business, the other assessee's in line of textile trading, Gross Profit (GP) Ratio ranges from 2% to 5%. The AO, accordingly, noted that he had no option, except to reject the books of accounts as no details were furnished to justify the declared profit. The AO in absence of basic details, not accepted the books result declared by the assessee. The AO estimated 3% of turnover as income of assessee. The assessee's turnover is Rs.31.67 crore, accordingly, the AO worked out the addition of Rs.95,03,809/- [3% of turnove....

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....al the assessee raised plea that no proper opportunity was given and that the assessee was prevented from producing details and evidences during the assessment, despite taking such plea no paper book or evidence or books of account is filed before Tribunal. We are conscious of the facts that those corresponding additional ground is already rejected. The assessee despite pendency of appeal for more than five did nothing except for seeking dates. The assessee or their AR have even not filed books result for earlier or subsequent years or any order of any comparable companies cases who are engaged in similar business. The ld.AR simply made is submission that addition restricted by the ld. CIT(A) is on higher side and concluded his submissions ....

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....rein following grounds have been raised by the revenue. "1. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in granting relief to the assessee in reducing the gross profit rate at 0.5% as against at 3% estimated by the AO, without considering the facts and of the case in its entirety. 2. The ld. CIT(A) has erred in law and on facts in granting relief to the assessee without considering the fact that the addition on account of gross profit was made by applying the provisions of Section 145(3) as no documentary evidences with regard to purchases, sales and expenses were filed by the assessee, despite sufficient opportunities granted to the assessee. 3. It is, therefore, prayed that th....