VIKRAM DAWRA, Jaipur V. ITO, Jaipur

ITA 658/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4959 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 13-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Keywords: Rejection of books of accounts; Business income

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 658/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 SHRI VIKRAM DAWRA PROP. M/S. JAIPUR CRAFTS 342, CHANDI KI TAKSAL, JAIPUR CUKE VS. THE ITO WARD- 5(1) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABFPD 5704 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL , CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/10/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21 /10/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 25-04-2016 FOR THE ASSESSM ENT YEAR 2009-10 RAISING THEREIN FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N UPHOLDING REJECTION OF BOOKS OF ACCOUNT BY APPLYING THE PROVISION OF SECTION 145(3). 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE TRADING ADDITION OF RS. 18,60,149/- BY ITA NO. 658/JP/2016 SHRI VIKRAM DAWRA VS. ITO, WARD- 5 (1), JAIPUR . 2 APPLYING GROSS PROFIT RATE OF 23.83% AS AGAINST GRO SS PROFIT RATE OF 15.64% DECLARED BY THE ASSESSEE. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE D ERIVES INCOME FROM MANUFACTURING AND SALE OF TEXTILES AND GARMENTS. HE IS ALSO ENGAGED IN JOB WORK OF LADIES SUIT DESIGNING AND STITCHING. DU RING THE YEAR, HE HAS DECLARED G.P. RATE OF 15.64% ON THE TURNOVER OF RS. 2,27,34,996/- AS AGAINST G.P. RATE OF 27.33% ON THE TURNOVER OF RS.1 ,41,27,207/- IN THE PRECEDING YEAR. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, AO REQUIRED THE ASSESSEE TO EXPLAIN THE REASONS FOR DO WNFALL IN G.P RATE. IN RESPONSE TO SAME, ASSESSEE VIDE LETTER DT. 12.11.20 11 , 29.11.2011 AND 19.12.2011 EXPLAINED THE REASONS FOR SAME. THE AO, HOWEVER, REJECTED THE BOOKS OF ACCOUNTS BY APPLYING THE PROVISION OF SEC. 145(3) BY GIVING THE FOLLOWING REASONS:- (I) THE ASSESSEE HAS NOT MAINTAINED ANY QUANTITATIV E TALLY OR STOCK REGISTERS IN RESPECT OF RAW MATERIAL OR FINISHED GO ODS AND THUS CONSUMPTION OF RAW MATERIAL IS SUBJECT TO VERIFICATION. THE ASSESSEE A S PER HIS WILL HAVE MANIPULATED THE PRODUCTION RESULTS AND COST OF PRODUCTION. (II) NO QUANTITATIVE RECORD OF THE FIREWOOD IS AVAI LABLE. THE INCREASE IN FUEL EXPENSES IS RESPONSIBLE FOR 1.30% DOWN FALL IN G.P. RATE WHICH IS SUBSTANTIAL. (III) THE ASSESSEE MAY ALSO HAVE SOLD THE SALWAR TO M/S PLY CLOTHING ON COST TO COST BASIS IN THE PRECEDING YEAR AND HENCE THIS IS NOT A DISTINGUISHABLE FEATURE FOR FALL IN G.P. RATE OF CURRENT YEAR. (IV) THE DETAILS OF SPECIFIC MATERIAL GIVEN BY THE ASSESSEE FOR DEVELOPMENT OF NEW PRODUCTS ARE ONLY THE REGULAR ITEMS WHICH AR E USED BY THE ASSESSEE IN MANUFACTURING OF GARMENTS. THERE IS NOTHING SPECIFI C IN THESE DETAILS TO SUGGEST THAT THESE GOODS HAVE BEEN CONSUMED FOR DEVELOPMENT AND DESIGNING WORK AS THESE ITA NO. 658/JP/2016 SHRI VIKRAM DAWRA VS. ITO, WARD- 5 (1), JAIPUR . 3 ARE REGULAR ITEMS AND NO SEPARATE RECORDS OF THE SA ME HAS BEEN MAINTAINED. THE RATIO OF CONSUMPTION OF CLOTH IS ALSO INCREASED IN DEVELOPMENT WORK. (V) SINCE THE JOB WORK RECEIPTS ARE INCREASING, THE ASSESSEE HAS ALSO INCREASED THE RATIO OF LABOUR CHARGES, JOB CHARGES CLOTH, DYES & CHEMICALS AND THUS THE EXPENSES SHOWN IN THE TRADING ACCOUNT ARE EXCES SIVE AND NOT ACTUAL. (VI) AS REGARDS TO THE CLOSURE OF SHOWROOM AT CHAND IGARH DURING THE YEAR ON 30.06.08 EVEN AFTER EXCLUDING THE GROSS PROFIT O F CHANDIGARH SHOWROOM, THE G.P. RATE FOR A.Y. 08-09 WORK OUT TO 23.83% AND FOR A.Y. 09-10 IT IS 15.22%. THE AO, THEREAFTER, COMPUTED THE AVERAGE G.P. RATE OF THREE YEARS FROM A.Y. 07-08 TO 09-10 AT 25.71% AND APPLIED THE SAME ON TOTAL TURNOVER OF THE ASSESSEE RESULTING INTO TRADING ADDITION OF RS. 22,87,559/- 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO UPHELD THE REJECTION OF BOOKS OF ACCOUNT S U/S 145(3) BY HOLDING THAT THE AO HAS NOT REJECTED THE BOOKS OF A CCOUNTS ONLY FOR NON- MAINTENANCE OF STOCK REGISTER BUT SEVERAL OTHER REA SONS. HOWEVER, AFTER CONSIDERING THAT THE SHOWROOM AT CHANDIGARH WAS CLO SED DURING THE YEAR AND ALSO AFTER EXCLUDING THE GROSS PROFIT OF THIS S HOWROOM, HE WORKED OUT THE G.P. FOR A.Y. 08-09 AT 23.83% AND DIRECTED TO A PPLY THIS G.P. RATE ON THE TURNOVER OF THE YEAR UNDER CONSIDERATION. THE D ETAILED OBSERVATION OF THE LD. CIT(A) AT PARA 2.3 OF HIS ORDER IS REPRODUC ED AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASS ESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASS ESSEE DERIVES INCOME FROM MANUFACTURING AND SALE OF TEXTILES AND GARMENTS AND ALSO IS ENGAGED IN JOB WORK IN LADIES SUIT DESIGNIN G AND STITCHING. IT ITA NO. 658/JP/2016 SHRI VIKRAM DAWRA VS. ITO, WARD- 5 (1), JAIPUR . 4 WAS NOTICED BY THE ASSESSING OFFICER THAT THERE WAS A SHARP DECLINE IN GROSS PROFIT % RETURNED AT 15.64% AS COMPARED TO 27.33% & 34.16% IN THE IMMEDIATELY PRECEDING YEARS I.E. FIN ANCIAL YEAR 2007-08 AND FINANCIAL YEAR 2006-07.THE AO FURTHER O BSERVED THAT THERE WAS INCREASE IN JOB WORK CHARGE WHILE INCREAS E IN OWN SALES HAD BEEN MODERATE AND AS PROFIT MARGINS ARE BETTER IN JOB WORKS, THE ASSESSING OFFICER OPINED THAT IT CREATED A DOUB T REGARDING THE CORRECTNESS OF ACCOUNTS. THE BOOKS OF ACCOUNTS, BILLS AND VOUCHERS WERE EXAM INED AND THE ASSESSING OFFICER AFTER EVALUATING THE ASSE SSEE'S RESPONSE REACHED THE CONCLUSIONS REPRODUCED AT PAGE 4 AND 5 OF THIS ORDER FROM POINTS AT (A) TO (F). IN VIEW OF THE SPECIFIC DEFECTS FOUND IN THE BOOKS OF ACCOUNT, THE ASSESSING OFFICER REJECTED TH E SAME U/S 145(3) OF THE I.T. ACT, 1961. AFTER REJECTION OF BO OKS, THE AVERAGE OF GROSS PROFIT RATE FROM A.Y. 2007-08 TO ASSESSMEN T YEAR 2009-10 WHICH WORKS OUT TO 25.71% WAS APPLIED ON THE TOTAL DECLARED TURNOVER OF RS. 2,27,34,966/- AND THE ADDITION OF RS. 22,87,559/- WAS MADE. IN THE PRESENT PROCEEDINGS, THE APPELLANT HAS TAKEN THE PLEA THAT DAY TO DAY BOOKS OF ACCOUNT SUBJECT TO AUDIT U /S 44AB OF THE I.T. ACT, 1961, ALL PURCHASES AND SALES ARE FULLY V ERIFIABLE AND NO SPECIFIC PURCHASE OR SALE IS POINTED OUT WHICH IS N OT VERIFIABLE. IT IS FURTHER CONTENDED THAT SIMPLE NON-MAINTENANCE OF ST OCK REGISTER CANNOT BETAKEN AS BASIS FOR INVOKING THE PROVISION OF SECTION 145(3) OF THE I.T. ACT, 1961. AS DISCUSSED ABOVE, T HE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNT ONLY FOR NON- MAINTENANCE OF STOCK REGISTER BUT SEVERAL OTHER REA SONS AS REPRODUCED EARLIER, HENCE THE REJECTION OF BOOKS U/ S 145(3) OF THE I.T. ACT, 1961 IS UPHELD. AS REGARDS THE PERCENTAGE APPLIED BY THE ASSESSING OFFICER, THE APPELLANT SUBMITTED THE REASON FOR FALL IN GROS S PROFIT RATE DURING THE ASSESSMENT PROCEEDINGS AND DISCUSSED THE IN THE ASSESSMENT ORDER. IT WAS FURTHER CLAIMED THAT THE T URNOVER HAD INCREASED FROM RS. 1,05,64,590/- IN FINANCIAL YEAR 2006-07 TORS 2,27,34,996/- IN THE YEAR UNDER CONSIDERATION AND H ENCE BESIDES OTHER REASONS, FOR THE DECLINE IN GROSS PROFIT, THI S WAS ALSO ONE OF ITA NO. 658/JP/2016 SHRI VIKRAM DAWRA VS. ITO, WARD- 5 (1), JAIPUR . 5 THE REASONS. CONSIDERING THE DETAILS ON RECORD DISC USSED AS ABOVE THE GROSS PROFIT % MAY BE ADOPTED AT 23.83% WHICH I S THE GROSS PROFIT FOR THE PREVIOUS YEAR EXCLUDING THE SHOWROOM IN CHANDIGARH. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 2.3 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PROVISIO N OF SECTION 145(3) OF THE ACT AND ALSO CONFIRMING THE TRADING ADDITION OF RS. 18,60,149/- BY APPLYING GROSS PROFIT RATE OF 23.83% AS AGAINST GRO SS PROFIT RATE OF 15.64% DECLARED BY THE ASSESSEE. TO THIS EFFECT THE LD. AR OF THE ASSESSEE FILED THE WRITTEN SUBMISSION AS UNDER:- (1) THE ASSESSEE IS MAINTAINING DAY TO DAY BOOKS OF ACCOUNTS WHICH ARE SUBJECT TO AUDIT U/S 44AB OF THE IT ACT, 1961. ALL THE TRAN SACTION OF PURCHASES AND SALES ARE FULLY VERIFIABLE FROM THE SUPPORTING BILLS, VOUCHERS AND DOCUMENTS MAINTAINED BY ASSESSEE. THE AO HAS NOT POINTED OUT ANY SPECIFIC PURCHASE OR SALES WHICH IS NOT VERIFIABLE. SO FAR AS QUANTITATIVE DETAILS OR STOCK REGISTER IN RESPECT OF RAW MATERIA L IS CONCERNED, WE MAY POINT OUT THAT THE ITEMS WHICH ARE CONSUMED ARE OF VARIED VARIETY, SIZ ES, DESIGNS, ETC. AND MAINTENANCE OF STOCK REGISTER IN RESPECT OF SUCH NUMBER OF ITEMS FOR SMA LL BUSINESSMAN IS NOT FEASIBLE. SIMPLY NON MAINTENANCE OF STOCK REGISTER CANNOT BE TAKEN AS BA SIS FOR INVOKING THE PROVISION OF SEC. 145(3) OF THE ACT. (2) IT MAY BE POINTED FURTHER THAT THE AO HAS APPLI ED ESTIMATED G.P RATE OF 25.71%AFTER REJECTING THE BOOKS OF ACCOUNT BY INVOK ING THE PROVISIONS OF SEC. 145(3). THE ASSESSEE EXPLAINED THE FALL IN THE G.P. RATE VIDE L ETTER DT. 12.11.2011, 29.11.2011 AND 19.12.2011 (PB 9-20) . THE MAIN REASON FOR DECLINE IN G.P. RATE ARE AS U NDER:- (I) DURING THE YEAR, THE ASSESSEE HAS CLOSED DOWN T HE SHOWROOM AT CHANDIGARH IN THE MONTH OF JUNE 08. SHOWROOM AT CHANDIGARH IS RETAIL SHOWROOM AND PROFIT MARGIN AT CHANDIGARH IS AROUND 32.41% IN THE IMMEDIATELY PREC EDING YEAR. THE ASSESSEE WAS HAVING TWO OPTIONS EITHER TO TRANSFER GOODS FROM CHANDIGARH TO JAIPUR AND INCUR TRANSPORTATION COST OR DISPOSE OF THE GOODS AT CHANDIGARH ITSELF. TRANSPOR TATION COST AND DAMAGES DURING TRANSPORTATION WAS COMPARATIVELY HIGHER THAN DISPOS ED OF THE GOODS AT CHANDIGARH ITSELF. ACCORDINGLY, THE ASSESSEE HAS SOLD STOCK AT THE TIM E OF CLOSURE OF CHANDIGARH BRANCH OF RS.10,50,000/- TO M/S A.P. JAIN & SONS AND EARNED O NLY PROFIT MARGIN OF 6.65%. THIS FACT HAS BEEN ACCEPTED BY THE AO ALSO. THUS THIS HAS RESULTE D INTO DECLINE IN G.P. RATE IN THE YEAR UNDER CONSIDERATION (PB 17-18) . IN PERCENTAGE TERMS, IT HAS THE IMPACT ON G.P AT 3.5% (27.33% - 23.83%) AS PER CALCULATION OF AO (PAGE 2 OF THE ASS ESSMENT ORDER). (II) COMPLETE BILLS OF FUEL EXPENSE FROM UNREGISTER ED DEALERS WITH SUPPORTING VOUCHERS & DOCUMENTS ARE VERIFIED BY THE AO. THE PAYMENT IN MO ST OF THE CASES IS BY ACCOUNT PAYEE ITA NO. 658/JP/2016 SHRI VIKRAM DAWRA VS. ITO, WARD- 5 (1), JAIPUR . 6 CHEQUE. THE EXPENDITURE FOR FUEL EXPENSE INCURRED D URING THE YEAR IS RS.8,00,956/- WHICH IS 3.52% ON TOTAL TURNOVER AS COMPARED TO 2.2% IN A.Y 2008-09 AND IN 2.02% A.Y 2007-08. THE INCREASE IN FUEL EXPENSE IS RESPONSIBLE FOR 1.3% DO WNFALL IN GROSS PROFIT (PB 16) . THE INCREASE IN FUEL EXPENSE IS ON ACCOUNT OF DEVELOPMENT OF NEW DESIGNS & PRODUCTS. (III) THE ASSESSEE IN THE RELEVANT YEAR HAS DEVELOP ED NEW DESIGNS & PRODUCTS AND ALSO MADE SAMPLES FOR SHOWING TO THE CUSTOMER. THE CONSU MPTION RATIO OF SALE IS 44.85% WHICH WAS 35.55% IN A.Y. 2008-09 AND 27.49% IN A.Y. 2007- 08. THE MATERIAL USED FOR THE DEVELOPMENT OF NEW PRODUCTS WAS EXPENSIVE & BETTER QUALITY THEN THE MATERIAL WHICH WAS USED FOR REGULAR ITEM. COPY OF BILLS OF THESE SPECIFIC M ATERIAL USED HAVE BEEN SUBMITTED TO THE AO FOR VERIFICATION VIDE LETTER DT. 19.12.2011 (PB 17) . SIMILARLY THE EXPENDITURE ON DYEING AND CHEMICAL AS RATIO TO TURNOVER IS 16.46% WHICH WAS 1 3.73% IN A.Y. 2008-09. ALSO DURING THE YEAR APPROX 30% OF THE MATERIAL WAS DAMAGED & USED FOR SAMPLING AS EXPLAINED VIDE LETTER DT. 12.11.2011 (PB 9-11) . (IV) DURING THE YEAR, OUTSIDE JOB CHARGES HAVE INCR EASED FROM 1.32% OF THE TURNOVER IN A.Y. 2007-08 TO 3.28% IN A.Y. 2009-10. THE MARGIN I N JOB WORK IS LOWER THAN THE SALE AND THEREFORE THIS HAS ALSO RESULTED IN DECLINE IN G.P. RATE. (V) SALES EFFECTED AND JOB WORK DONE FOR M/S. PALAI CLO THING IS AS UNDER:- PARTICULARS JOB WORK SALES TOTAL TURNOVER OF THE ASSESSEE 140.68 LACS 86.67 LACS RECEIPTS FROM M/S. PALAI CLOTHING 64.11 LACS 30.89 LACS APPROX 42% OF THE BUSINESS OF ASSESSEE IS ONLY FROM ONE CONCERN I.E. M/S PALAI CLOTHING. THE JOB WORK WAS DONE FOR MAKING OF LADIES SUIT DESIGNI NG AND STITCHING. THIS WORK WAS HAVING 3 ITEMS PER PIECE I.E. SALWAR, KURTA AND DUPATTA. PAL AI CLOTHING WAS PROVIDING MAIN FABRICS I.E CLOTH/FABRIC FOR KURTA AND DUPATTA. KURTA IS A BASI C FANCY ITEM FOR WHICH CLOTH WAS GIVEN BY THE PARTY. ALSO, DUPATTA IS GENERALLY MADE OF 'CHIFFON' OR OTHER FANCY FABRIC WHICH CLOTH WAS GIVEN BY THE PARTY. CLOTH FOR SALWAR WAS PURCHASED BY ASS ESSEE HIMSELF AND SOLD TO M/S. PALAI CLOTHING ON COST TO COST BASIS. THE SALE OF SALWAR CONSIST OF 50% OF TOTAL SALES MADE TO HIM AND REMAINING 50% SALE IS OF OTHER ITEM WHICH CONTAINS NORMAL MARGIN SAY 5% TO 7% (PB 13). (VI) DURING THE PROCESSING FOR JOB WORK SOME CLOTHE S WERE STITCHED WITH SOME DEFECTS WHICH WAS REJECTED AND THESE CLOTHES HAD TO BE SOLD EVEN BELOW THE FABRIC COST (PB 18). (VII) THE OBSERVATION OF THE AO THAT ASSESSEE HAS I NCREASED THE OTHER EXPENSES RELATED TO JOB WORK ON INCREASE OF JOB WORK RECEIPT IS ONLY AN ASSUMPTION. NO EVIDENCE FOR THE SAME WAS BROUGHT ON RECORD. THUS, IF ALL THE ABOVE REASONS ARE TAKEN INTO ACCOU NT, THE G.P. RATE IS COMPARABLE TO THE PREVIOUS YEARS FOR WHICH DETAILED WORKING WAS SUBMI TTED VIDE LETTER DT. 12.09.2011 (PB 11) . THE CIT(A) OUT OF THE ABOVE REASONS FOR DECLINE IN THE G.P. RATE ONLY ACCEPTED THE FIRST REASON STATED ABOVE AND DIRECTED TO APPLY G.P. RATE OF 23. 83%. SHE HAS NOT CONSIDERED THE OTHER REASONS WHICH RESULTED IN THE DECLINE IN THE G.P. R ATE. THEREFORE, THE LD. CIT(A) HAS ERRED IN DIRECTING TO APPLY G.P. RATE OF 23.83% AND THEREFOR E THE TRADING ADDITION CONFIRMED BY HER BE DIRECTED TO BE DELETED. ITA NO. 658/JP/2016 SHRI VIKRAM DAWRA VS. ITO, WARD- 5 (1), JAIPUR . 7 3. RELIANCE IS PLACED ON FOLLOWING CASES:- (1) PR. CIT VS. HUES INDIA LTD. 2015-TIOL-2275 (RAJ .) DT. 30.07.2015 (2) MALANI RAMJIVAN JAGANNATH VS. ACIT 207 CTR 19 ( RAJ.) (3) ASHOKE REFRACTORIES P. LIMITED V. CIT 279 ITR 4 57 (CAL.) (4) CIT VS. JAS JACK ELEGANCE EXPORTS 324 ITR 95/ 2 33 CTR 398 (DEL.) (2010) (5) CIT VS. SMT. POONAM RANI 41 DTR 194 (DEL.) (201 0) (6) CIT VS. OM OVERSEAS 315 ITR 185 (PUNJ. & HAR.) (7) CIT V. GOTAN LIME KHANIZ UDYOG 256 ITR 243(RAJ) 2.4 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE WRITTEN SUBMISSIO N OF THE ASSESSEE AND ALSO THE CASE LAWS RELIED UPON. IT IS NOTED FROM TH E RECORDS THAT THE AO COMPUTED THE AVERAGE GROSS PROFIT RATE OF THREE YEA RS OF THE ASSESSEE FROM A.Y. 2007-08 TO 2009-10 AT 25.71% AND APPLIED THE S AME ON TOTAL TURNOVER OF THE ASSESSEE WHICH RESULTED INTO TRADI NG ADDITION OF RS. 22,87,559/-. IT IS NOTED THAT THE LD. CIT(A) HAS U PHELD THE REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT AND ALSO OBS ERVED THAT THE SHOWROOM AT CHANDIGARH WAS CLOSED DURING THE YEAR A ND AFTER EXCLUDING THE GROSS PROFIT OF THIS SHOWROOM, THE LD. CIT(A) A DOPTED THE GROSS PROFIT RATE OF 23.83% AS IT WAS THE GROSS PROFIT RATE FOR THE ASSESSMENT YEAR 2008-09. CONCLUSIVELY, THE LD. CIT(A) DIRECTED TO APPLY THE GROSS PROFIT RATE OF 23.83% ON THE TURNOVER OF THE YEAR UNDER C ONSIDERATION. I HAVE ALSO NOTICED FROM THE RECORDS THAT THAT GROSS PROFI T HAS HAVE DECLINED FOR THE FINANCIAL YEAR UNDER CONSIDERATION IN PERCENTAG E TERMS BUT ALSO IN ITA NO. 658/JP/2016 SHRI VIKRAM DAWRA VS. ITO, WARD- 5 (1), JAIPUR . 8 ABSOLUTE TERMS THE GROSS PROFIT FOR THE YEAR WAS OF RS. 35,57,601/- ON SALES OF RS. 2,27,34,966/- WHILE GROSS PROFIT WAS R S. 36,09,452/- ON THE SALES OF RS. 1,05,64,590/- FOR THE FINANCIAL YEAR 2 06-07. THE TURNOVER IS MORE THAN DOUBLE IN COMPARISON OF F.Y. 2006-07 BUT OVER ALL GROSS PROFIT HAS COME DOWN FOR NO VALID REASON. THE ASSESSEE FAI LED TO EXPLAIN THE SAME. TAKING INTO CONSIDERATION FACTS OF THE CASE, ORDERS OF THE LOWER AUTHORITIES AND SUBMISSIONS OF THE LD. AR OF THE AS SESSEE, I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) WHICH IS SUSTAINED. THUS THE APPEAL OF THE ASSESSEE IS DISMISSED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 21/10/2016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 /10/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI VIKRAM DAWRA JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 5 (1), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 658/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR