TaxTMI 
TaxTMI 
2023 (1) TMI 326
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.... law. "4.(i) Whether the Hon'ble Tribunal was justified in upholding the order of the Ld.CIT(A), in spite of the fact that the A.O. has rightly arrived in estimating net profit @ 7% of the assessee company by establishing the fact that the assessee company has got loss at the flag and of the year with the help of its sister concerns as mentioned in para 9 of assessment order? (ii) Whether the Hon'ble Tribunal was justified in upholding the order of the Ld. CIT(A) in directing to take net profit @ 0.5% as again 7% estimated by the AO overlooking the fact that both Ld.CIT(A) as well as Hon'ble Tribunal has upheld the action of the AO to reject the books of account by invoking the provisions of section 145(3) of the Act? (iii) Whether ....
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....he Assessing Officer and it eventually chose to opine that the reply given was general in nature and without any evidence of contractual obligations and proof of commercial expediency. The loss had incurred not in one transaction but approximately in 300 transactions in the year end and no prudent business skilled person will incur such losses. Both the companies, according to the Assessing Officer, belonged to the same group and there were no physical transactions of goods involved. It also rejected the books of accounts maintained by the assessee company under Section 145(3) and permitted the profit of the company @ 7% proposed in the show cause notice. 4. This was challenged by the assessee before the CIT (Appeals). It was argued before....
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.... that to meet with the ends of justice, the net profit is required to be fixed at 0.5% considering the result declared by the assessee as well as the prevalent market rate in the trading of wholesale metal business. It also held that the NP ratio of 7% in this sector is beyond imagination and unbelievable. Most of the trading concerns are operating in miniscule GP ratio 0.5% to 1% and in absence of any external comparables, the Assessing Officer could have analyzed the books results of the assessee in the earlier year before arriving at a reasonable estimate of GP/NP. There was absence of any internal or external comparitive figures of the sector of the assessee's business. 7. When challenged before the Tribunal, it had agreed with the app....