TaxTMI 
TaxTMI 
2025 (2) TMI 1868
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....r referred to as "the Act") for AY 2011-12 dated 03.10.2023, which has been passed against the assessment order u/s 143(3) of the Act, dated 31.03.2014. 2. The Revenue is in appeal before the Tribunal raising the following grounds of appeal: "1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), NFAC is justified in allowing the appeal of the assessee by deleting the addition amounting to Rs. 2,92,99,460/- on account of estimated Gross Profit made by the AO, when the assessee has failed to substantiate the increase of cost of production along with corroborative evidence i.e. bills and vouchers for the expenses pertaining to the year under consideration. 2. Whether on the facts and circumstanc....
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....ver, the Ld. AO after going through all the documents and the records made an addition of Rs. 2,92,99,460/- on account of shortfall in GP ratio. Being aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who called for the remand report from the Ld. AO and allowed the appeal. Aggrieved with the order of the Ld. CIT(A), the Revenue has filed the appeal before this Tribunal. 4. Rival contentions were heard and the submissions made have been examined. The Ld. AR drew our attention to the fact that the GP ratio in AY 2010-11 was 13.56% which, in the year under consideration, was 11.68% and the addition has been made on account of lower GP ratio only. The Ld. AO had made the addition because the documents fi....
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....n addition of Rs. 2,92,99,460/- made on account of short fall in G.P. Ratio. A.Y. 2010-11 A.Y. 2011-12 SALES Rs. 118,59,87,550/ Rs. 155,84,81,950/ Cost of Production Rs. 106,05,15,713/ Rs. 144,12,96,567/ Depreciation included Rs. 1,39,66,127/ Rs. 1,20,95,780/ Gross profit Add: Depreciation Rs. 14,69,40,441/ + 1,39,66,127/ Rs. 17,00,87,646/ + 1,20,95,780/ GROSS PROFIT Rs. 18,33,66,568/ Rs. 18,21,83,426/ G.P. Ratio 13.56% 11.68% Fall in G.P. Ratio 13.56% - 11.68% 1.88% Addition on account of fall in G.P. Ratio 1558481950*1.88 /100 2,92,99,460/-" 5. In the course of the appeal, the Ld. CIT(A) called for the ....
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....,208/- compared to Rs. 4,399/- of the immediately preceding assessment year, which being higher implied that there was no reason for the Ld. AO to reject the Manufacturing Account of the assessee. The Ld. AO had also stated that during the remand proceedings the assessee did not furnish corroborative evidence to substantiate the increase in cost of price. However, it was observed that all the possible evidence and supporting documents in relation to the manufacturing account were submitted during the assessment proceedings and the Ld. AO could not find any fault with any of the documents furnished by the assessee. Therefore, the finding of the Ld. AO that the assessee did not furnish corroborative evidence was perverse and contrary to the f....
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....h the finding of the Ld. CIT(A) and also the submission made before us. The Ld. Sr. DR. repeated the argument that the documents filed before the bank were not filed before the Ld. AO nor the increase in the cost of production was substantiated and the Ld. CIT(A) has erred in para 6.6 to hold that the bills were provided. The Ld. AR countered by arguing that the Ld. CIT(A)'s order covers all the aspects of the assessment and the Ld. AO has not followed the provisions of section 145(3) of the Act. He also drew attention to the fact that the matter was remanded to the Ld. AO and no discrepancy was pointed out and the Ld. CIT(A) has given justification for the fall in the GP rate which is 1.30%. Having considered the facts of the case, we are ....