ITO., Ward-10(1), Hyderabad, Hyderabad V. Vonamala Jagadesshwaraiah, Hyderabad

CO 54/HYD/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0555 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: C P RAMASWAMY
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1783/HYD/2013 ASSESSMENT YEAR: 2009-10 INCOME-TAX OFFICER, WARD 10(1), HYDERABAD. M/S VONAMALA JAGADISHWARAIAH, SECUNDERABAD. PAN AAEFV8917B (ASSESSEE) (RESPONDENT) C.O. NO. 54/HYD/14 (IN ITA NO. 1783/HYD/2013 ASSESSMENT YEAR: 2009-10) M/S VONAMALA JAGADISHWARAIAH, SECUNDERABAD. PAN AAEFV8917B INCOME-TAX OFFICER, WARD 10(1), HYDERABAD. (CROSS OBJECTOR) (RESPONDENT) REVENUE BY SHRI RAMAKRISHNA BANDI ASSESSEE BY SHRI C.P. RAMASWAMY DATE OF HEARING 11-02-2015 DATE OF PRONOUNCEMENT 08-04-2015 O R D E R PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-VI, HYDERABAD DATED 23/09/2013 FOR AY 2009-1 0. ASSESSEE ALSO FILED C.O. AGAINST THE SAID ORDER OF CIT(A). 2 ITA NO. 1783/HYD/2013 & C.O. 54/HYD/14 M/S VONAMALA JAGADISHWARAIAH 2. THE CROSS OBJECTION FILED BY THE ASSESSEE WAS DE LAYED BY 234 DAYS. THE REASON FOR THE DELAY HAS BEEN STATED IN T HE AFFIDAVIT FILED BY THE ASSESSEE DATED 30.09.2014 AS FOLLOWS: 2. I HAVE RECEIVED THE COPY OF FORM NO.36 ALONG WI TH NOTICE OF HEARING ON 14 APRIL 2014 SOMETIME IN MARC H, 2014. I DO NOT KNOW THE EXACT DATE OF RECEIPT AS I DID NOT PRESERVE THE POSTAL ENVELOP. WHEN THE NOTICE FOR TH E NEXT DATE OF HEARING OF 14 JULY 2014 WAS RECEIVED IN MA Y, 2014 I HAVE HANDED OVER THE SAME TO MY CHARTERED ACCOUNT ANT SRI P.M. VENKATESAN OF M/S V. NARASIMHA IYER AND COMPANY, WHO FURTHER REQUESTED DR. C.P. RAMASWAMI, ADVOCATE TO APPEAR ON BEHALF OF MY FIRM. 3. I HAVE BEEN ADVISED TO FILE A CROSS OBJECTION, W HICH SHOULD HAVE BEEN FILED BY MIDDLE OF APRIL, 2014. TH E DELAY OF ABOUT 234 DAYS HAS BEEN CAUSED DUE TO MISPLACEME NT OF THE POSTAL ENVELOP, HEART ATTACH SUFFERED BY MY CHA RTERED ACCOUNTANT SRI P.M. VENKATESAN DUE TO THE PROPOSED DEMOLITION OF HIS OFFICE BY GHMC AND CONSEQUENT WRI T PETITION ETC., TO SAFE GUARD HIS OFFICE AND MY INAB ILITY TO PRECISELY GIVE THE DATE OF SERVICE OF FORM NO.36 TO BE FILLED IN THE CROSS OBJECTION MEMO, BESIDES FREQUENT HOSPITALIZATION OF MY MOTHER WHO HAS BEEN SUFFERING FROM A FRACTURE OF THE LEG FOR THE LAST ONE YEAR. 3. CONSIDERING THE REASONS STATED IN THE AFFIDAVIT, WE CONDONE THE DELAY OF 234 DAYS IN FILING THE CROSS OBJECTION BY THE ASSESSEE AND TAKE UP THE SAME FOR CONSIDERATION ALONG WITH REVEN UES APPEAL. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF TRADING IN PURE GOLD AND SILVER ORNAMENTS. IT HAD FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERA TION ADMITTING TOTAL INCOME OF RS. 15,97,648. THE ASSESSING OFFICER FROM THE SALE BILLS, BOOKS OF ACCOUNT, BILLS/VOUCHERS PRODUCED FOUND THA T THE SALES ARE MOSTLY CASH SALES AND THE PURE GOLD RATES DIFFERED IN A SINGLE DAY. IN THIS REGARD, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE CALLING FOR INFORMATION ON THE DIFFERENCES IN THE RATES VAR IED IN A SINGLE DAY AND WHY THE DIFFERENCE IN RATES SHOULD NOT BE TREAT ED AS THE UNEXPLAINED INCOME FOR THE YEAR UNDER CONSIDERATION . THE ASSESSEE IN RESPONSE SUBMITTED THAT THE BULLION TRADE IS VOL ATILE MARKET AND THE 3 ITA NO. 1783/HYD/2013 & C.O. 54/HYD/14 M/S VONAMALA JAGADISHWARAIAH RATE CHANGES ACCORDING TO INTERNATIONAL MARKET. THE ASSESSEE HAD SUBMITTED A COPY OF THE 'GRAPH' SHOWING THE FLUCTUA TIONS IN RATES FOR THE DATES 29 TH AND 30THE NOVEMBER, 2011 AND 30 TH NOVEMBER, 2011 AND 1 ST DECEMBER, 2011 AND STATED THAT THE GRAPH SHOWING T HE RATES REFLECTS THE FLUCTUATIONS VARYING FOR EVERY SECOND AND HENCE IT IS NOT POSSIBLE TO CHARGE THE SAME RATE FOR THE WHOLE DAY. IT WAS STATED THAT AS THEIR VOLUME OF TRADE IS LARGE THEY TRY TO DISPO SE OF THE GOODS AT THE EARLIEST AND MAKE QUICK TURNOVER AND DEPOSIT TH E RECEIPTS IN THEIR LOAN ACCOUNT WITH THE BANK BY WHICH THE INTEREST BU RDEN CAN BE REDUCED. IT WAS SUBMITTED-THAT THE RATES WOULD BE C ONSTANT ONLY ON HOLIDAYS OTHERWISE, AS IN THE CASE OF STOCK EXCHANG E, THE RATES CHANGE FROM MORNING TO EVENING. THE ASSESSING OFFIC ER OBSERVED THAT THE ASSESSEE HAD NOT FURNISHED THE DETAILS OF RATE FLUCTUATIONS AT DIFFERENT TIMINGS AND HAVE NOT PRODUCED ANY DETAILS EXCEPT FURNISHING A GRAPH RELATED TO OTHER COUNTRIES INDICATING THE F LUCTUATIONS. IT WAS OPINED BY THE A.O THAT THOUGH THE PRICE DEPENDS ON VARYING CONDITIONS OF INTERNATIONAL MARKET, THE RATES OF PU RE GOLD ARE DIFFERING FROM PLACE TO PLACE IN INDIA AS WELL, HENCE THE SUB MISSIONS OF THE ASSESSEE ARE NOT ACCEPTABLE. THE ASSESSING OFFICER AFTER CONSIDERING THE EXPLANATION AND GRAPH SUBMITTED BY THE ASSESSEE OPINED THAT THROUGH THE PAR TICULARS OF THE SALES, ASSESSEE HAD CONCEALED THE INCOME CHARGEABLE TO TAX AND HENCE REJECTING THE BO OKS OF ACCOUNT ESTIMATED THE PROFIT @0.5% OF THE TOTAL TURNOVER OF PURE GOLD OF RS. 309,21,97,256/- WHICH WORKED OUT TO RS. 1,54,60,986 /- AND BROUGHT THE SAME TO TAX. AGGRIEVED BY THE ORDER OF ASSESSIN G OFFICER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A). 5. BEFORE THE CIT(A) ASSESSEE FILED PETITION FOR AD MISSION OF ADDITIONAL EVIDENCE BEING IN THE NATURE OF GRAPHIC DETAILS OF THE RELEVANT PERIOD FOR THE AY UNDER CONSIDERATION. THE ASSESSEE STATED THAT THE ASSESSING OFFICER HAD SOUGHT THIS INFORMAT ION DURING ASSESSMENT PROCEEDINGS, WHICH COULD NOT BE PRODUCED DUE TO NON AVAILABILITY AT THAT TIME AND HAD SOUGHT FOR ADMITT ING THE SAME AS 4 ITA NO. 1783/HYD/2013 & C.O. 54/HYD/14 M/S VONAMALA JAGADISHWARAIAH ADDITIONAL EVIDENCE AND CONSIDERATION OF SAME IN DE CIDING THE APPEAL. THE ASSESSEE ALSO FURNISHED A COPY OF THE A SSESSMENT ORDER FOR THE ASST. YEAR 2008-09 DT. 25.11.2010 U/S. 143(3) OF THE INCOME-TAX ACT, WHEREIN THE INCOME RETURNED BY THE ASSESSEE OF RS. 11,54,535/- WAS ACCEPTED BY THE ASSESSING OFFICER. AS SOUGHT BY THE ASSESSEE, THE ADDITIONAL EVIDENCE WAS ADMITT ED AND. WAS FORWARDED TO THE ASSESSING OFFICER FOR SUBMISSION O F REMAND REPORT. THE ASSESSING OFFICER ON EXAMINATION OF THE GRAPH STATED THAT THERE ARE RATE FLUCTUATIONS IN A DAY, H OWEVER TO ASCERTAIN THE GENUINENESS ON OTHER DATES WHERE THE SALE RATES WERE REPORTED TO BE CONSTANT, THE AR OF THE ASSESSE E WAS ASKED TO FURNISH THE G RAPHIC DETAILS PERTAINING TO THE DATES ON 02.04.2008, 05.04.2008, 19.04.2008, 08.05.2008, 15.05.2008, 02. 06.2008, 06.06.2008 AND 27.06.2008. IT WAS STATED THAT HE AR HAD FURNISHED THE DETAILS OF 02.04.2008, 15.05.2008, 2.06.2008 AND 06.06.2008 ONLY AND ON VERIFICATION OF THE SAME, IT WAS FOUND THAT THERE ARE RATE FLUCTUATIONS IN A DAY FOR THE GIVEN DATES BUT ON VERIFICATION OF BOOKS OF ACCOUNTS AND SALES INVOICE S OF THE ASSESSEE, IT WAS FOUND THAT THE ASSESSEE HAD SOLD . THE GOLD AT A UNIFORM RATE ON SAME DAY, THOUGH THERE IS A RATE FL UCTUATION AND OPINED THAT THE STAND TAKEN BY THE AO IN REJECTING THE BOOKS IS AFFIRMED. THE AO FURTHER STATED IN THE REMAND REPOR T DT 08/08/2013 AS UNDER: THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE H AS NO SANCTITY FOR THE FOLLOWING REASONS: A) THOUGH THE GRAPHIC DETAILS REVEALS RATE FLUCTUAT ION, THE ASSESSEE HAS SOLD AT UNIFORM RATES ON THE DATES MEN TIONED ABOVE, WHICH CONFIRMS THAT THE ASSESSEE HAS NOT COM PLIED THE STANDARDS OF / MARKET RATES THAT ARE PREVAILING IN DAY-TO-DAY AFFAIRS. B) ON VERIFICATION OF THE GRAPH PRODUCED, IT IS FOU ND THAT AT A PARTICULAR POINT OF TIME IN A DAY, THE GRAPH IS U NIFORM. BUT THE ASSESSEE COULD NOT CORROBORATE ANY EVIDENCES TO ASCERTAIN THE TIME AT WHICH THE ASSESSEE HAS SOLD. FACTUALLY IT IS NOT APPLICABLE TO ASSESSEE, AS HE N OT FOLLOWED THE RATES AS PER THE RATES PREVAILING IN T HE 5 ITA NO. 1783/HYD/2013 & C.O. 54/HYD/14 M/S VONAMALA JAGADISHWARAIAH INTERNATIONAL STANDARD RATE. C) THE RATES IN DOLLARS THAT ARE REFLECTING IN THE GRAPH ARE NOT TALLYING WITH THE EQUIVALENT CONVERSION RATES I N SELLING THE GOLD IN THE ABOVE MENTIONED DATES. D) THE ASSESSEE HAS PRODUCED THE INACCURATE INFORMA TION. E) THE 'ASSESSEE STATED THAT THE RATES ARE VARYING' BASING UPON THE INTERNATIONAL MARKETS. AS SEEN FROM THE DA ILY NEWS PAPERS, THE RATES OF PURE GOLD AND SILVER VARY FROM PLACE TO PLACE I. E. THE RATES ARE DIFFERENT AT HYDERABAD, CHENNAI, MUMBAI, VIJAYAWADA, VISAKHAPATNAM AND PRODDUTUR. HENCE, THE OBJECTION RAISED BY THE ASSES SEE REGARDING THE RATE VARIATION DEPENDING UPON THE RATES OF THE INTERNATIONAL MARKETS IS NOT CORRECT. IF THE ASSESSEE'S CONTENTION IS CORRECT, THEN THE RATES AT ALL THESE ABOVE MENTIONED PLACES SHOULD BE IN UNIFORM, BUT AR E NOT. F) THE ASSESSEE HIMSELF HAS STATED THAT THE RATES V ARY FROM SECOND TO SECOND. AS SEEN FROM THE BOOKS OF ACCOUNT S, BILLS, THE RATES ON 02.04.2008, 05.04.2008, 19.04.2008, 08.05.2008, 5.05.2008, 02.06.2008, 06.06.2008, 27.06.2008 ETC. THE RATES ARE UNIFORM. BUT AS SEEN FROM THE GRAPH ON THE DATES MENTIONED ABOVE, THE RATES ARE FLUCTUATING. THEREFORE, THE ASSESSEE'S CO NTENTION IS NOT CORRECT. 6. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE OBSERVED THAT ASSESSEE HAD A HUGE TURNOVER OF RS. 309.21 CRORES UNDER THE HEAD OF TRADE IN BULLION ITSELF, FOR THE YEAR UNDER REFERENCE, ON WHICH THE PROFIT OF RS. 30,38,314/- WAS OFFERED, AS PER THE DETAILS BROUGHT ON RECORD. IT WAS OBSERVED THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE A.O HAS OBSERVED THAT T HE ASSESSEE WAS RECORDING THE PURCHASES AS PER THE MARKET RATES , WHICH WERE SHOWN TO BE FLUCTUATING CONSTANTLY, INCLUDING ON TH E INTRADAY BASIS, WHERE AS THE SALES ARE RECORDED AT UNIFORM PRICE AN D MOST OF THE SALES ARE IN CASH. CIT(A) OBSERVED THAT FOR THE SAI D REASONS AND OTHER REASONS AS ENLISTED IN ASSESSMENT ORDER, SUCH AS OVER WRITING ON THE SECOND COPY OF SALES INVOICES AND FAILURE TO FURNISH THE RATES AT DIFFERENT TIMES, EXCEPT FURNISHING THE GRA PH ON THE RATE FLUCTUATIONS AT INTERNATIONAL LEVELS, THE ASSESSING OFFICER HAD TO REJECT THE BOOKS OF ACCOUNTS AND ESTIMATE THE GROSS PROFIT @ 6 ITA NO. 1783/HYD/2013 & C.O. 54/HYD/14 M/S VONAMALA JAGADISHWARAIAH 0.5 0 /0 ON GOLD BULLION SALES OF RS. 309,21,97,256/- RES ULTING IN NET ADDITION OF RS. 1,24,22,672/- (RS.1,54,60,986 - RS. 30,38,314). THE CIT(A) FURTHER OBSERVED THAT ASSESSEE'S OBJECT ION ON THE ISSUE WAS THAT WHERE THE RATE IS FLUCTUATING, THE S ALE RATE CANNOT BE STABLE OR UNIFORM, FOR WHICH THE ASSESSEE WAS RE LYING ON THE GRAPHIC DETAILS ON PRICE VARIATION. . THE CIT(A) NO TED THAT THE MAIN COMPLAINT OF THE AO INCLUDING THE OBSERVATIONS IN THE REMAND REPORT IS THAT THE ASSESSEE WAS MAKING THE SALES AT UNIFORM RATE, ON THE DAYS OF SUCH OBSERVATIONS ON 02.04.2008, 05. 04.2008, 19.04.2008, 08.05.2008, 15.05.2008, 06.06.2008 AND 27.06.2008 ETC. THE CIT(A) POINTED OUT THAT THE SALES IN CASH HAS COMPOUNDED THE DOUBTS OF THE ASSESSING OFFICER FOR NOT RELYING ON THE BOOKS OF ACCOUNT MAINTAINED AND THE BASIC FACT REMAINS THAT, WHERE THE GOLD RATE IS FLUCTUATING IN INTERNATIONAL MARKETS, IT IS NOT ELABORATED BY THE ASSESSEE ON THE FEASIBILITY OF MA INTAINING UNIFORM SALE PRICE, THROUGHOUT THE DAY, IF NOT ON A LL THE DAYS, BUT ON FEW DAYS AS POINTED OUT BY ASSESSING OFFICER. CI T(A) OBSERVED THAT IT IS CLEAR THAT WHERE THE SALE PRICES ARE NOT IN CONSONANCE WITH THE PURCHASE PRICES AND WHERE THE SALES ARE TA KING PLACE IN CASH, SUCH TRANSACTIONS ARE BECOMING VULNERABLE FOR SUSPICION OR DOUBTS, WITH LACK OF VERACITY. CIT(A) WAS OF THE VI EW THAT THE AO IS JUSTIFIED IN ADOPTING THE GROSS PROFIT ON THE BU LLION DIFFERENT FROM THE RATES SHOWN BY THE ASSESSEE IN BOOKS, BY REJECT ING THE BOOKS OF ACCOUNT. IN VIEW OF THE ABOVE OBSERVATIONS, THE CIT(A) FINALLY HELD AS FOLLOWS: IN THE INSTANT CASE, THE ASSESSEE IS INTO THE BUSI NESS OF BULLION AND OTHER RELATED ITEMS ON WHOLESALE BASIS, WHERE THE TURNOVERS RECORDED ARE MORE THAN 300 CRORES, FO R THE YEAR UNDER REFERENCE. THE GROSS PROFITS UNDER THE T RADE OF GOLD BULLION, WHERE THE TURNOVER RECORDED WAS SHOWN AT RS. 309.21 CRORES, WAS SHOWN AROUND 0.098% (RS. 30,38,314 ON RS. 309.21 CR.), WHERE AS THE A.O HAS ESTIMATED THE SAME AT 0.5%, RESULTING IN ADDITIONAL PROFITS OF RS. 1.24 CRORES TO THE ASSESSEE. 7 ITA NO. 1783/HYD/2013 & C.O. 54/HYD/14 M/S VONAMALA JAGADISHWARAIAH IT IS A FACT THAT THE MARGINS ARE QUITE LOW IN TRAD ING IN BULLION AND SPECIALLY IN THE WHOLESALE TRADING, SUC H MARGINS ARE BOUND TO BE MUCH LOWER. HOWEVER, THE ASSESSEE F AILED TO EXERCISE THE OPTION/OPPORTUNITY FOR EXPLAINING O N THE OBSERVATIONS MADE IN THE REMAND REPORT, ON THE ISSU E. KEEPING ALL THE ABOVE FACTS IN MIND, IT IS HELD THA T THERE IS SCOPE FOR MANIPULATIONS OF THE PROFITS, WHERE THE S ALES ARE EFFECTED IN CASH AND SALE PRICES ARE NOT IN TANDEM WITH THE PURCHASE PRICES. UNDER THE CIRCUMSTANCES, IT MAY BE REASONABLE TO PUT THE GROSS PROFIT AT 0.20% AS AGAINST 0.098% SHOWN BY THE ASSESSEE IN HIS BOOKS, AND AS AGAINST THE RATE OF 0.5% ADOPTED BY THE A.O. ACCORDINGLY, THE A.O IS DIRECTED TO RE-COMPUTE THE TOTAL INCOME OF THE ASSESSEE BY ADOPTING THE GROSS PROFIT ON BULLION TRADE RECEIPTS OF RS. 309.21 CRORES AT 0.20 0 /0, WHICH MAY MEET THE JUSTICE AT BOTH THE ENDS. THUS, THIS GROUND OF APPEAL IS TREATED AS PARTLY ALLOWED. 7. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US RAISING FOLLOWING THE GROUNDS OF A PPEAL: 1. THE LD. CIT(A) IS NOT CORRECT IN FACT AND IN LAW IN REDUCING THE MARGIN OF ESTIMATED PROFIT IN SITUATION WHEN TH E BOOKS OF ACCOUNT OF THE ASSESSEE/FIRM HAVE BEEN REJ ECTED. 2. THE LD. CIT(A) IS NOT CORRECT IN FACT AND IN LAW IN REDUCING THE PROFIT MARGINS WITHOUT ANY COMPARABLE CASES IN THE SAME LINE OF TRADE. 8. ASSESSEE ALSO FILED C.O. AGAINST THE ORDER OF CI T(A) RAISING THE FOLLOWING CROSS OBJECTIONS: 1. THE ORDER OF THE CIT(A) IN SO FAR AS IT IS AGAIN ST THE INTEREST OF THE RESPONDENT/ASSESSEE, IS AGAINST LAW , WEIGHT OF EVIDENCE AND PROBABILITIES OF THE CASE. 2. THE CIT(A) FAILED TO APPRECIATE THAT NO SPECIFIC DEFECTS IN THE ACCOUNTS OF THE ASSESSEE WERE POINTED OUT BY TH E ASSESSING OFFICER EXCEPT BY WAY OF GENERALISATION A ND CONSEQUENTLY ERRED IN MAKING AN ESTIMATE OF GP OF M ORE THAN DOUBLE THE FIGURE DECLARED BY THE ASSESSEE. HE OUGHT TO HAVE ACCEPTED THE BOOK RESULTS. 3. THE CIT(A) FAILED TO APPRECIATE THAT IN BULLION TRADE RATE FLUCTUATION IS THE RULE AND UNIFORM RATE IS AN EXCE PTION AND 8 ITA NO. 1783/HYD/2013 & C.O. 54/HYD/14 M/S VONAMALA JAGADISHWARAIAH CONSEQUENTLY ERRED IN ESTIMATING GP ON THE HIGHER S IDE WITHOUT FINDING ANY COMPARABLE CASE AND WITHOUT FIN DING ANY SPECIFIC DEFECTS IN THE ACCOUNTS OF THE ASSESSEE. 9. BEFORE US, THE LD. DR CONTENDED THAT THE CIT(A) IS NOT CORRECT IN REDUCING THE MARGIN OF ESTIMATED PROFIT IN SITUATION WHEN THE BOOKS OF ACCOUNT OF ASSESSEE HAVE BEEN REJECTED . HE FURTHER CONTENDED THE CIT(A) WAS WRONG IN REDUCING THE PROF IT MARGINS WITHOUT ANY COMPARABLE CASES IN THE SAME LINE OF TR ADE. 10. THE ASSESSEE HAS FILED GROSS PROFIT RATIO FROM A.Y 2007-08 TO A.Y 2011-12 WHICH IS PLACED IN THE PAPER BOOK AS FOLLOWS: F.Y A.Y TURNOVER OF PURE GOLD GROSS PROFIT GROSS PROFIT RATIO 2006-07 2007-08 3341977961 3204474 0.096% 2007-08 2008-09 3779050510 2952724 0.078% 2008-09 2009-10 3092197266 3109447 0.1% 2009-10 2010-11 4319393923 2975709 0.068% 2010-11 2011-12 5776888462 5133161 0.089% FROM THE ABOVE, WE FIND THAT THE AVERAGE GROSS PROF IT AS A PERCENTAGE OF TURNOVER OF PURE GOLD WAS LESS THAN 0 .098% AS RETURNED BY THE ASSESSEE FOR THE CURRENT A.Y EXCEPT FOR THE ASSESSMENT YEAR 2008-09 WHERE THE GROSS PROFIT RETU RN WAS 0.1%. IN VIEW OF THE CONSISTENT PROFITABILITY OF THE ASSE SSEE IS LESS THAN THE PERCENTAGE OFFERED FOR THIS YEAR (EXCEPT FOR A MARGINAL INCREASE IN THE AY 2008-09), NO SPECIFIC CIRCUMSTAN CES WAS BROUGHT TO OUR NOTICE BY THE REVENUE FOR ADOPTING A HIGHER RATE OF GROSS PROFIT AS ADOPTED BY THE AO OR THE CIT (A). T HEREFORE, WE ALLOW THE CROSS OBJECTION FILED BY THE ASSESSEE AND DISMISS THE 9 ITA NO. 1783/HYD/2013 & C.O. 54/HYD/14 M/S VONAMALA JAGADISHWARAIAH APPEAL OF THE REVENUE. 11. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED A ND C.O. FILED BY ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 8 TH APRIL, 2015 SD/- SD/- (P.M. JAGTAP) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 8 TH APRIL, 2015 KV/PV COPY TO:- .1.ITO, WARD 10(1), ROOM NO. 516, 5 TH FLOOR, A BLOCK, IT TOWERS, AC GUARDS, HYDERABAD. 2. M/S VONAMALA JAGADISHWARAIAH, D.NO. 3-4-12, SRI MAHAKALI STREET, SECUNDERABAD 3. CIT(A)-VI, HYDERABAD 4. . CIT-VI, HYDERABAD 5. THE DR, ITAT, HYDERABAD