2023 (11) TMI 325

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.... 4,69,30,975/-. 3. Briefly stated, the facts of the case are that the assessee company is engaged in the manufacturing of Polyester Staple Fibers and Non-Woven fabric. Return was filed on 29.09.2012 declaring an income of Rs. 5,40,940/-. Return was selected for scrutiny assessment and, accordingly, statutory notices were issued and served upon the assessee. 4. During the course of scrutiny assessment proceedings, the assessee was asked to furnish the following details: "a) Copy of Balance Sheet, Audit Report and accounts of Shiva Tex Fabs (P) Ltd. for A. Y. 2011-12 & 2012-13 b) Details: of commission .expenses, rebate, Discount and their justification. c) Justification of fall in G.P Ratio from 14.41% to 8.94% and why it should no....

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....N.P. during the year under consideration along with copy of books of account and relevant details before the ld. CIT(A) which were remanded by the ld. CIT(A) to the Assessing Officer for his comments. It is the say of the ld. counsel for the assessee that in the remand report, the Assessing Officer has not pointed out any adverse observations regarding details furnished by the assessee along with reasons for decline in the N.P. 10. The ld. counsel for the assessee vehemently stated that the sole basis for making the impugned addition is the decline in profit when compared with the immediately preceding A.Y whereas in A.Y 2010-11, profit was much low in comparison to the profit for A.Y 2011-12 and yet no adverse inference was drawn. The ld.....

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....04,030/-. 15. The ld. CIT(A), at Para 4 of his order, has wrongly considered the bank rate qua the sanction letter as on 31.01.2013 which, on face, is erroneous in as much as the impugned A.Y is 2012-13. Copy of sanction letter issued by the Allahabad Bank in A.Y is 10.06.2010 and the prime lending rate for the year was 14.25%% to 15%. 16. Another reason for decline in N.P is the sharp increase in consumption of raw materials which is Rs. 79,77,04,918/- when compared to the immediately preceding A.Y Rs. 47,03,91,426/-. We find that the increase in sale price is not commensurate with the increase in cost of consumption due to substantial increase in the cost of raw material, being waste of plastic bottles, the availability of which was sca....