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Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI
Before: Shri Joginder Singh,
आदेश / O R D E R
The assessee is aggrieved by the impugned order dated 19/02/2015 of the Ld. First Appellate Authority, Mumbai. The only ground raised in this appeal pertains to upholding disallowance of Rs.5,81,293/- on account of low gross profit margin without assigning any reason and further upholding levy of interest u/s 234B and 234C of the Income Tax Act, 1961 (hereinafter the Act).
During hearing of this appeal, nobody was present for the assessee, in spite of issuance of registered AD notice issued on 10/11/2015 and 31/12/2015. The registered AD notice issued for 15/12/2015 was duly received by the assessee as is evident from postal acknowledgment returned by the postal authorities. The assessee did not appear and the appeal was adjourned to 23/12/2015. On that date also, the assessee did not appear, therefore, again registered notice was sent to the assessee for today i.e. 21/01/2016. The assessee neither represented itself nor moved any adjournment petition. It seems that the assessee is not interested to pursue its appeal. It cannot be kept pending for want of prosecution for indefinite period, therefore, I have no option to proceed ex-parte, qua the assessee, and tend to dispose of the appeal on the basis of material available on record.
2.1. On the other hand, the ld. DR, Shri V.S. Jadhav, defended the addition of the impugned amount by contending that for A.Y. 2009-10, the gross profit was 32.06%, whereas, for the current assessment year, the assessee showed the G.P. at 28.98% against which the ld. Assessing Officer estimated the G.P. at 30%. The crux of the argument by the ld. DR is in support to the addition.
2.2. I have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee firm is manufacturer and exporter of readymade garments, fabrics and local sales. The assessee declared income of Rs.2,13,190/- in its return filed on 13/10/2010. The case of the assessee was selected for scrutiny, therefore, through notices, the assessee was asked to furnish the details. The assessee responded to the notices and filed the details for verification. Copy of audited account, profit & loss account and balance sheet was also furnished by the assessee as is evident from page-1 of the assessment order itself. The assessee declared total turnover of Rs.5,69,89,515/- resulting into gross profit of Rs.1,65,13,566/-. The assessee was asked to explain the reason of low G.P. as in A.Y. 2009-10, the gross profit was shown at Rs.32.06%. The assessee explained that the decrease was due to increase in the turnover. However, the ld. Assessing Officer estimated the gross profit at 30% which resulted into addition of Rs.5,81,293/-. On appeal, before the ld. Commissioner of Income Tax (Appeals), the addition was confirmed. The assessee is in appeal before this Tribunal.
If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, under the facts narrated hereinabove, there is on dispute to the fact that the addition has been made on the basis of estimation. It is also noted that the assessee neither produce any evidence for claim of low G.P. and merely explained that it is due to increase in the turnover. At the same time, the reason of estimation, though seems to be plausible but the totality of facts, that manufacturing expenses also increase from 38.61% to 42.61%, therefore, to put an end to the litigation and by taking a lenient view, the gross profit is reduced to 29.5% in place of 30% estimated by the ld. Assessing Officer and confirmed by ld. Commissioner of Income Tax (Appeals), thus, the appeal of the assessee is partly allowed.
Finally, the appeal of the assessee is partly allowed.
This order was pronounced in the open in the presence of ld. DR at the conclusion of the hearing on 21/01/2016.