TaxTMI 
TaxTMI 
2026 (3) TMI 1099
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....he Assessing Officer, ITO, Ward-4(4), Agra (hereinafter referred to as 'Id. AO'). 2. The assessee has raised the concise grounds on 5-7-2018 as under :- "1. That merely because in the opinion of A.O. the profit is low. The invoking of provisions of sec. 145(3) sustained by C.I.T. (A) is illegal and arbitrary. 2. That C.I.T. (A) has erred on facts and in law in holding that results of comparable cases are not relevant or cannot be applied in the case of rejection of books of accounts as done in the case of the appellant. 3. That estimate of higher receipts for 185788 bags stored beyond the capacity of the cold storage i.e. 184017 bags (92008.80 Quintal) as certified by the Licensing Authority and 182959 ....
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....e of 25% is unjust, illegal and arbitrary. 8. That the appellant craves to add or alter any other ground of appeal as may be warranted." 3. I have heard the rival submissions and perused the materials available on record. The assessee is a partnership firm engaged in the business of running and operation of cold storage under the name and style of Shri Kaila Devi Ice and Cold Storage. The return of income for the assessment year 2011-12 was filed by the assessee firm on 29-09- 2011 declaring total income at Rs Nil. The case was selected for scrutiny. During the course of scrutiny assessment, the Learned AO rejected the books of accounts and determined the total income at Rs 25,37,910 in the assessment framed under section 143(3)....
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....ital discrepancies, defects noticed as discussed in hereinabove. (6) The rental receipts were also suppressed substantially on the facts stated hereinabove, and therefore, the N.P. rate went down drastically as compared to last two previous years. (7) As per written reply dated 26.2.2014, expenditure on a/c of loading, unloading and grading charges amounted to Rs. 25,73,499/- i.e Rs. 4.75+4.25+5.00=Rs. 14/- per bag of 50 kg. Assessee itself accepted that if interest element is excluded form the total hire charges, then hire charges amounted to Rs. 1,02,45,704/- being the charges @ Rs. 56 per bag of 50 kg. Since, this year the assessee has inflated the expenses under the head loading, unloading and grading charges and claim....
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.... applied before deduction u/s 40(b) of the act 25% Net Profit = 1,30,05,160*25% Rs. 32,51,290:00 5. The Learned AR before me pointed out that the average of net profit declared in preceding two years was not 25% as observed by the Learned AO. The Learned AR pointed out that the Learned AO had arbitrarily increased the quantity of bags from 182959 to 185788 bags and also arbitrarily increased the rate per bag from Rs 56 to Rs 70 per bag and adopted net profit rate of 25% before partners' remuneration and interest on capital account paid to partners. All these estimations were carried out by the Learned AO due to the fact that the net profit had reduced considerably during the year under consideration when compared to precedin....
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.... 19,76,323 20,49,252 48,00,189 36,65,072 C Gross Profit (A-B) 72,86,177 72,40,148 54,45,515 43,57,600 GP Ratio (% of A) 78.66 77.94 53.15 54.32 D Other Income Interest 6,02,650 4,64,470 - Insurance Claim Received 50,512 - Total 6,02,650 50,512 4,64,470 - E Other Expenses 12,20,515 19,89,796 12,79,227 9,69,101 Selling & Admin Exp Financial 22,50,938 18,08,248 20,00,076 17,99,408 Charges Depreciation 16,70,771 14,72,377 13,03,180 11,51,574 Total 51,42,225 52,70,421 45,82,483 39,20,083 F Net Profit (C+D-E) 27,46,602 20,20,239 13,27,502 ....