TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 2070
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....total receipt. 2. The facts in brief are that the assessee is engaged in the business of purchase of livestock and meat from farmers and shepherds and sell them to slaughter houses or supply the meat and other small meat factories. During the year under consideration the assessee has shown sales of Rs. 38,52,30,886/- as compared to the earlier preceding years which was Rs. 9,01,77,387/-. The net profit declared by the assessee was @ 0.12% which was Rs. 5,00,522/- which was lower than the earlier year declared @.44%. During the year assessee has shown purchases of Rs. 38,20,44,886/-. Ld. AO noted that assessee has made all the payments in cash to the persons from whom purchases were made. Ld. AO asked the assessee to provide following detai....
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....iness activities of the assessee." 4. Before the Ld. CIT(A) the assessee submitted that assessee has maintained party wise details and sales along with the ledger account where were duly furnished before the AO including the bank statement for whole of the financial year to show that all the sales have been made through banking channels. The assessee has also placed details of party wise purchases for the whole year alongwith the stock register which were also placed before the Ld. CIT (A) alongwith the letter which filed before the Assessing Officer enclosing these details. It was vehemently contended that the observation of the AO that none of the details were furnished was factually incorrect and all the details as asked by the AO were ....
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....uld not be applicable because cash payment is allowed for the purchase of produce of animal husbandry including livestock, meat, hides and skins etc. Assessee has also filed the details of turnover and net profit ratio of earlier year and in this year which is as under:- Particulars F.Y. 2011-12 F.Y. 2010-11 Turnover 38,52,30,886 9,01,77,387 Expenditure 38,47,30,364 8,97,76,017 Gross Profit 14,72,000 9,14,262 Gross Profit ratio 0.38% 1.01% Net Profit 5,00,522 4,01,370 Net Profit ratio 0.13% 0.45% 5. Assessee also challenged the estimation of such a high rate of profit without any basis or considering the assessee's past record. The entire discussion of the assessee's explanation has been dealt i....
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.... his assessment order has stated that no details were furnished and accordingly has made best judgement assessment order after rejecting the books of accounts. From the perusal of the replies filed before the AO which is placed on the paper book which has also been submitted before the Ld. CIT (A), we find that all the details of purchases, stock register, ledger account of sales, details of party wise purchases details of sales, bank statement, details of party wise purchases, etc. were duly filed before the AO. The list of replies and details filed before the AO as appeared in the paper book are as under:- Copy of reply filed before AO Enclosed : i. Copy of ledger a/c of sales ii. Copy of ledger a/c of Frigorifico Allana Ltd....
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....e purchasers and also explained the nature of trade whereby the assessee has no option but to make the purchases in cash which otherwise has statutory sanctity in view of Income Tax Rules under 6DD, then simply because assessee could not furnish the particulars of the purchasers, that does not mean that the entire purchases are bogus or are not verifiable. While examining the trading result, it is important to keep in mind the nature of trade and the trade practices which needs to be understood and while determining the income, trade practices prevalent and the accounting system has to be appreciated. All the trade cannot be viewed from same glass as the different trade has different realities especially in country like ours where most of u....