2025 (10) TMI 771

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....ppeal assailing the order dated 09.07.2020 passed in ITA No.1705/Bang/2019 for the assessment year 2009-10, by raising the following substantial questions of law: "(i) Whether the Income Tax Appellate Tribunal (for short, 'the Tribunal') was justified in law in holding that the appellant failed to explain to the satisfaction of the Assessing Officer, as to why there was a lower gross profit during the year, which is contrary to fact, thus has passed a perverse order on the facts and circumstances of the case? (ii) Whether the Tribunal was justified in holding that the estimation of income was reasonable, which is perverse finding, in so far as it is, without rejecting the books, on the facts and circumstances of the case?"....

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.... 25,00,000/-. 4. Sri S.V. Ravishankar, learned counsel for the assessee, submits that the books of account reflecting purchases and sales were produced before the Assessing Officer. The assessee had offered an explanation for the decrease in gross profit on account of fluctuation in the exchange rate. It is submitted that the pre-agreed sale price, owing to a pre-arranged contract, was not revised in proportion to the increase in purchase cost. Learned counsel further submits that the enhancement of 1% in gross profit and the consequent estimated addition of Rs. 25,00,000/- is without any basis. It is contended that the Assessing Officer, while estimating the gross profit, has not rejected the books of account and, in the absence of such....

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....ain products to its sister concern, and sales to the said concern constitute about 95% of its total sales. The present appeal pertains to the assessment year 2009-10. It is stated that both prior and subsequent to the said year, the percentage of sales to the sister concern has remained the same. There is no dispute that the purchases and sales are duly accounted. It is also admitted that the purchase price increased on account of the rise in the exchange rate of the Dollar. It is axiomatic that when the assessee imports material from abroad, the purchase price necessarily depends on the exchange rate of the Dollar. 7. The Assessing Officer, by way of estimation, added a sum of Rs. 25,00,000/-, which has been upheld by the CIT(A) as well....