M/S. COSMOS, MUMBAI v. INCOME TAX OFFICER WARD-24(1)(4), MUMBAI

ITA 2912/MUM/2009 | 2005-2006
Pronouncement Date: 07-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 291219914 RSA 2009
Assessee PAN AAIFM1544M
Bench Mumbai
Appeal Number ITA 2912/MUM/2009
Duration Of Justice 1 year(s)
Appellant M/S. COSMOS, MUMBAI
Respondent INCOME TAX OFFICER WARD-24(1)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-05-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 07-05-2010
Date Of Final Hearing 08-04-2010
Next Hearing Date 08-04-2010
Assessment Year 2005-2006
Appeal Filed On 07-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: MUMBAI BEFORE SHRI D MANMOHAN VP AND SHRI R K PANDA AM ITA NO 2912/MUM/2009 (ASSESSMENT YEAR: 2005-06) M/S. COSMOS D-202 SHREE VALLABH ANAND LINK ROAD MALAD (W) MUMBAI -400 064 PAN : AAIFM 1544 M VS ITO -24(1)(4) PRATYAKSHKAR BHAVAN BANDRA KURLA COMPLEX BANDRA MUMBAI APPELLANT RESPONDENT APPELLANT BY: SHRI P R TOPRANI RESPONDENT BY: SHRI A R BAIWAR ORDER PER R K PANDA AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 13 TH MARCH 2009 OF THE CIT (A)-XXIV MUMBAI RELATING TO ASSESSMENT YEAR 2005-06. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASS ESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT AGAINST TURNOVER OF RS 11.44 CRORES THE ASSESSEE HAS DECLARED GP OF RS . 59.87 LAKHS WHICH WORKS OUT TO 5.23% AS AGAINST 3.92% SHOWN IN THE PR ECEDING YEAR ON GROSS TURNOVER OF RS 8.86 CRORES. HOWEVER THE NET PROFIT SHOWN DURING THE YEAR WAS RS.1.32 LAKHS WHICH COMES TO 0.11% AND WHICH IS MUCH LESS THAN THE NET PROFIT OF 1.10% SHOWN IN THE PRECEDING YEAR. THE ASSESSING OFFICER THEREFORE ASKED THE ASSESSEE TO EXPLAIN T HE REASONS FOR THE SUBSTANTIAL REDUCTION IN NET PROFIT. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE DID NOT FILE ANY SATISFACTORY EXPLANATION. FURTHER IN RESPONSE TO THE NOTICES ISSUED U/S 133(6) THE ASSESSING OFFICE R OBSERVED THAT 5 PARTIES (AS PER PARA 5.3 OF THE ASSESSMENT ORDER) D ID NOT RESPOND TO SUCH NOTICES. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS MADE WITH THE SAID 5 PARTIES FAILING WHICH EX-PARTE ASSESSMENT WILL BE MADE. HOWEVER NOBODY THEREAFT ER APPEARED BEFORE HIM TILL THE PASSING OF THE ORDER. THE ASSE SSING OFFICER NOTED THAT ASSESSEE IS A MANUFACTURER AND EXPORTER OF READYMAD E GARMENTS. THE ASSESSING OFFICER COMPARED FINANCIAL RESULTS IN THE CASE OF M/S SHAH ITA 2912/M/2009 M/S. COSMOS ============ 2 ORIGINALS WHERE THE GP WAS SHOWN AT 34.61% AND NET PROFIT AT 28.57% FOR THE RELEVANT PERIOD. SIMILARLY IN THE CASE OF M/S . ANIL L SHAH (ENGAGED IN THE BUSINESS OF EXPORT OF GARMENTS) THE GP RATE WAS DECLARED AT 27.90% AND NET PROFIT AT 22.36% FOR THE RELEVANT PERIOD. SINCE THE ASSESSEE FAILED TO GIVE PROPER EXPLANATION FOR FALL IN THE N ET PROFIT RATE AND FAILED TO PRODUCE BOOKS OF ACCOUNTS BILLS AND VOUCHERS ETC F OR VERIFICATION THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 145 OF THE ACT. HE ESTIMATED ASSESSEES GROSS PROFIT @ 15% ON THE TOTA L TURNOVER OF RS. 11.44 CRORES WHICH COMES TO RS.1 71 65 294/-. HE ACCORDINGLY MADE AN ADDITION OF RS 1 11 77 787/- BEING THE DIFFERENCE I N THE GP TO THE TOTAL INCOME OF THE ASSESSEE. 3. BEFORE THE CIT (A) IT WAS SUBMITTED THAT THE AS SESSEE IS 100% EXPORT TRADER AND SUBMITTED COPIES OF BILLS AND VOU CHERS DURING ASSESSMENT PROCEEDING. THE PARTIES TO WHOM NOTICES U/S 133(6) WERE SENT HAD COMPLIED TO SUCH NOTICES. FURTHER THE PR OFIT & LOSS ACCOUNT OF THE TWO PARTIES WHOSE FINANCIAL RESULTS WERE COMPAR ED WITH THAT OF THE ASSESSEE WERE NEVER PROVIDED TO THE ASSESSEE AND T HEREFORE NO PROPER OPPORTUNITY WAS GIVEN. IT WAS FURTHER SUBMITTED TH AT THE ASSESSEE IS A TRADER IN STEEL UTENSILS GARMENTS PLASTIC ITEMS E TC WHEREAS THE PARTIES COMPARED BY THE ASSESSING OFFICER ARE MANUFACTURERS OF GARMENTS ONLY. THE ASSESSEE FURNISHED THE PROFIT AND LOSS ACCOUNT OF ONE M/S BILLION EXPORTS WHICH HAD SHOWN GP @ 5.79 ON EXPORT OF ST EEL UTENSILS WHEREAS THE ASSESSEE HAD SHOWN GP @ 5.74% ON EXPORT OF STEE L UTENSILS. SIMILARLY THE PROFIT AND LOSS ACCOUNT OF M/S GANES H GARMENTS WHICH HAD SHOWN GP @ 12.91% ON EXPORT OF GARMENTS WAS FILED A ND IT WAS SUBMITTED THAT THE ASSESSEE HAD SHOWN GP @ 10.61% O N EXPORT OF GARMENTS. 4. ON THE BASIS OF SUBMISSION OF THE ASSESSEE ALONG WITH THE DOCUMENTS FILED THE CIT (A) CALLED FOR REMAND REPO RT FORM THE ASSESSING OFFICER. HE ALSO DIRECTED THE ASSESSING OFFICER TO PROVIDE THE COPIES OF THE PROFIT AND LOSS ACCOUNT OF M/S SHAH ORIGINAL AND M/ S ANIL L SHAH DURING REMAND PROCEEDINGS. THE ASSESSING OFFICER SENT THE REMAND REPORT TO THE CIT (A) VIDE REMAND REPORT DATED 13.1.2009 WHEREIN IT WAS MENTIONED THAT INSPITE OF OPPORTUNITIES TO THE ASSESSEE AFTER PROVIDING THE P&L ACCOUNT OF THE ABOVE TWO PARTIES THE ASSESSEE DID NOT APPEAR DURING ITA 2912/M/2009 M/S. COSMOS ============ 3 HEARING BUT FILED WRITTEN SUBMISSIONS IN TAPAL. TH E ASSESSING OFFICER FURTHER REPORTED THAT THE SCHEDULE OF PRODUCT-WISE GROSS PROFIT COULD NOT BE VERIFIED AS THE ASSESSEE DID NOT ATTEND WITH THE RELEVANT SUPPORTING DETAILS. FURTHER THE PROFIT AND LOSS ACCOUNT OF M /S. BILLION EXPORTS GIVEN BY THE ASSESSEE RELATED TO ASSESSMENT YEAR 2007-08 AND THEREFORE IT IS NOT COMPARABLE WITH THE FINANCIAL RESULTS OF THE AS SESSEE FOR ASSESSMENT YEAR 2005-06. SIMILARLY THE PROFIT AND LOSS ACCOU NT OF M/S. GANESH GARMENTS RELATES TO ASSESSMENT YEAR 2004-05. FURTH ER THE TURNOVER OF THAT PARTY WAS RS.46.42 LAKHS AS AGAINST THE TURNOV ER OF RS.11.44 CRORES IN THE CASE OF THE ASSESSEE. THEREFORE BOTH THE C ASES RELIED ON BY THE ASSESSEE ARE NOT COMPARABLE. 5. THE LEARNED CIT (A) PROVIDED THE COPY OF THE REM AND REPORT TO THE ASSESSEE. HE OBSERVED THAT THE ASSESSEE NEITHER PR ODUCED THE REGULAR BOOKS OF ACCOUNTS NOR PRODUCED SUPPORTING DOCUMENTS DURING THE ASSESSMENT PROCEEDINGS. SO THERE WAS NO EVIDENCE OF THE BOOK RESULTS SHOWN BY IT IN THE P&L ACCOUNT FILED ALONG WITH THE RETURN OF INCOME. SINCE ASSESSEE COULD NOT EXPLAIN THE REASON FOR EXT REMELY LOW PROFIT THEREFORE HE HELD THAT THE ASSESSING OFFICER WAS F ULLY JUSTIFIED IN REJECTING THE BOOK RESULTS AND AS SUCH WAS JUSTIFIED IN ESTIM ATING THE INCOME. HE FURTHER OBSERVED THAT INSPITE OF BEING ASKED TO FUR NISH THE DETAILS OF TRADING IN RESPECT OF ITS MAJOR ITEMS AND PROFIT EA RNED THEREON THE ASSESSEE FURNISHED ONLY THE DETAILS BUT DID NOT PRO DUCE THE SUPPORTING DOCUMENTS ON THE BASIS OF WHICH THE DETAILS WERE PR EPARED. HE OBSERVED THAT ONE OF THE MAJOR TRADED ITEMS PROVIDED BY THE ASSESSEE IS GARMENT AND THE PROFITS SHOWN BY M/S. SHAH ORIGINALS AND M/ S ANIL L SHAH ENGAGED IN THE EXPORT OF GARMENTS WERE MUCH HIGHER THAN THA T OF THE ASSESSEE. HE OBSERVED THAT ALTHOUGH THE ASSESSEE HAS FILED PR OFIT AND LOSS ACCOUNT OF M/S GANESH GARMENTS FOR THE ASSESSMENT YEAR 2004 -05 FOR COMPARING ITS FINANCIAL RESULTS IT DOES NOT FILE THE PROFIT A ND LOSS ACCOUNT OF THE SAID CONCERN FOR THE ASSESSMENT YEAR 2005-06. SO WAS TH E CASE WITH M/S. GANESH GARMENTS WHOSE ACCOUNTS FOR THE ASSESSMENT Y EAR 2004-05 WAS PROVIDED. THE SUBMISSION OF THE ASSESSEE THAT THE OTHER MAJOR ITEMS EXPORTED BY IT WAS METAL UTENSILS AND FOR WHICH IT SUBMITTED A COMPARATIVE CASE IN THE CASE OF M/S BILLION EXPORTS THE CIT (A) OBSERVED THAT THE ASSESSEE FILED THE PROFIT AND LOSS ACCOUNT OF M/S BILLION EXPORTS ITA 2912/M/2009 M/S. COSMOS ============ 4 FOR THE ASSESSMENT YEAR 2007-08 BUT DID NOT PRODUCE THE PROFIT AND LOSS ACCOUNT OF THE SAID CONCERN OR SOME OTHER CONCERN D EALING WITH SIMILAR ITEMS FOR ASSESSMENT YEAR 2005-06. THEREFORE FINA NCIAL RESULT OF M/S BILLION EXPORT FOR THE ASSESSMENT YEAR 2007-08 CANN OT BE COMPARED WITH THE FINANCIAL RESULTS OF THE ASSESSEE FOR THE ASSES SMENT YEAR 2005-06. HE ALSO NOTED THAT DESPITE THE CLAIM OF THE ASSESSEE T HAT HE DID TRADE IN MANY ITEMS IT DID NOT FURNISH ANY COMPARATIVE CASE FOR OTHER ITEMS IN RESPECT OF SPECIFIC OPPORTUNITIES GIVEN. HE ACCOR DINGLY CONFIRMED THE ESTIMATION OF GP RATE AT 15% ESTIMATED BY THE ASSES SING OFFICER. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT (A) THE ASS ESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS :- I) THE LEARNED CIT (A) ERRED IN SUSTAINING THE ADDI TION OF RS 1 21 67 320/- OF GROSS PROFIT ON ESTIMATE BASIS. II) THE LEARNED CIT (A) ERRED IN IGNORING THE REPLY MADE TO ITO IN RESPONSE TO NOTICE IN REMAND REPORT PROCEEDINGS. III) THE LEARNED CIT (A) HAS ERRED IN PASSING THE O RDER IGNORING THE MATERIAL PLACED BEFORE AO (CONFIRMED BY AO) AND BEFORE HIM AND UPHOLDING THE REJECTION OF BOOKS U/S 145. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS A 100% EXPORT TRADER WHEREAS THE ASSESSING OFFIC ER PROCEEDED UNDER THE IMPRESSION THAT ASSESSEE IS A MANUFACTURER AS W ELL AS EXPORTER OF READYMADE GARMENTS. HE SUBMITTED THAT THE ASSESSEE IS NOT AT ALL A MANUFACTURER THEREFORE THE OBSERVATION OF THE ASS ESSING OFFICER TO THIS EXTENT IS WRONG. AS REGARDS ALLEGATION OF THE ASSE SSING OFFICER THAT FIVE PARTIES DID NOT RESPOND TO THE NOTICES ISSUED U/S 1 33(6) HE SUBMITTED THAT ONLY ONE PARTY DID NOT RESPOND TO SUCH NOTICE AND THE REMAINING FOUR PARTIES RESPONDED TO THE NOTICES ISSUED U/S 133(6). HE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSEE HAS FURNISHED FULL DETAILS FOR WHICH HE REFERRED TO THE REPLY GIV EN BY THE ASSESSEE ON VARIOUS DAYS THE COPIES OF WHICH ARE PLACED IN THE PAPER BOOK. HE REFERRED TO THE LETTERS ADDRESSED TO THE ASSESSIN G OFFICER VIDE ITS REPLY DATED 29TH MAY 2007 (PAPER BOOK PAGE 7 AND 8) REPL Y DATED 6TH AUGUST 2007 (PAPER BOOK PAGE 9 & 10) REPLY DATED 21ST AUG UST 2007 (PAPER BOOK PAGE 11) REPLY DATED 19TH SEPTEMBER 2007 (PAP ER BOOK PAGE 12) AND 10TH DECEMBER 2007 (PAPER BOOK PAGE 42). HE SU BMITTED THAT THE ASSESSING OFFICER HAS NOT PROVIDED THE FINANCIAL RE SULTS OF M/S SHAH ITA 2912/M/2009 M/S. COSMOS ============ 5 ORIGINALS AND M/S ANIL L SHAH DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO ENABLE THE ASSESSEE TO SUBSTANTIATE ITS CLAIM AS TO WHY AND HOW THOSE CASES ARE NOT APPLICABLE. ON THE OTHER H AND FINANCIAL RESULTS OF M/S BILLION EXPORTS AND M/S GANESH GARMENTS ARE COMPARABLE CASES WHERE THE PROFIT SHOWN BY THEM ARE MORE OR LESS SIM ILAR TO THAT OF THE ASSESSEE WHO IS IN THE SAME LINE OF BUSINESS. AS R EGARDS ALLEGATION OF THE ASSESSING OFFICER IN THE REMAND REPORT THAT ASSESSE E DID NOT ATTEND THE PROCEEDINGS AND FILED THE DETAILS IN TAPAL THE LEA RNED COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE REP LY GIVEN TO THE COMMISSIONER (APPEALS) A COPY OF WHICH IS PLACED O N PAPER BOOK PAGES 175 TO 179 AND DREW THE ATTENTION OF THE BENCH TO P ARA 3 OF THE SAID LETTER WHERE IT IS MENTIONED THAT THE ASSESSEE APPEARED BE FORE THE ASSESSING OFFICER BUT ON INSTRUCTION OF THE ASSESSING OFFICER ONLY THE DETAILS WERE FILED IN TAPAL. 7. THE LEARNED COUNSEL FOR THE ASSESSEE FILED ADDIT IONAL EVIDENCE BEFORE TRIBUNAL IN THE SHAPE OF COMPARATIVE CHART O F GP RATE AS ON 31ST MARCH 2005 31ST MARCH 2006 AND 31ST MARCH 2007 TH E DETAILS OF WHICH ARE AS UNDER:- M/S COSMOS STATEMENT SHOWING COMPARATIVE GP 31/03/2007 31/03/2006 31/03/2005 EXPORTS SALES 63 798 961 44 261 681 105 100 130 CLOSING STOCK 4 097 422 1 628 042 2 556 580 DIRECT INCOME (SALE OF DEPB) LICENCE/ DRAW BACK/INCENTIVE) 3 698 865 2 421 541 6 778 586 ---------------------------------------------- - TOTAL (A) 71 595 248 48 311 264 114 435 296 ---------------------------------------------- - PURCHASES (INCLUDING OPENING STOCK) 57 570 877 37 940 668 94 301 100 DIRECT EXPENSES 6 805 713 5 121 367 14 14 6 687 ---------------------------------------------- TOTAL (B) 64 376 590 43 062 035 108 447 787 ---------------------------------------------- G.P.(A-B) 7 218 658 5 249 229 5 987 509 % OF G.P 11.32% 11. 85% 5.70% NP BEFORE DEPRECIATION 7 24 507 358 023 760 518 % OF NP 1.14% 0.81% 0.73% 8. HE ALSO FILED A COPY OF THE ASSESSMENT ORDER PAS SED U/S 143(3) OF THE INCOME-TAX ACT ON 21ST DECEMBER 2009 FOR THE AS SESSMENT YEAR ITA 2912/M/2009 M/S. COSMOS ============ 6 2007-08 BY THE SAME ASSESSING OFFICER AND REQUESTED THE TRIBUNAL TO ADMIT THE ADDITIONAL EVIDENCES UNDER RULE 29 OF THE ITAT RULES. REFERRING TO THE ASSESSMENT ORDER FOR AY 2007-08 HE SUBMITTE D THAT THE ASSESSING OFFICER HAS ACCEPTED THE BOOK RESULTS SHOWN DECLARE D BY THE ASSESSEE. HE ACCORDINGLY SUBMITTED THAT THE BOOK RESULTS BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 SHOULD BE ACCEPTED. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE CIT (A). HE SU BMITTED THAT THE ASSESSEE NEITHER PRODUCED THE BOOKS OF ACCOUNT NOR PRODUCED THE SUPPORTING BILLS AND VOUCHERS BEFORE THE ASSESSING OFFICER. MERE SUBMISSION OF LEDGER ACCOUNTS OF VARIOUS EXPENSES / PURCHASES AND SALES ETC WILL NOT ENTITLE THE ASSESSEE TO SAY THAT IT HA S PRODUCED FULL DETAILS. HE SUBMITTED THAT EVERY ITEM HAS TO BE SUBSTANTIATED W ITH SUPPORTING BILLS AND VOUCHERS WHICH ASSESSEE FAILED TO DO. THE COM PARATIVE CASES CITED BY THE ASSESSEE CANNOT BE ACCEPTED SINCE THEY DO NO T RELATE TO THE ASSESSMENT YEAR INVOLVED NOR THE TURNOVER IS NEARER TO THE TURNOVER OF THE ASSESSEE. EVEN DURING THE REMAND PROCEEDINGS THE ASSESSEE DID NOT PRODUCE THE FULL DETAILS AND FILED CERTAIN DETAILS IN TAPAL ONLY WHICH SHOWS THAT THE ASSESSEE HAS NOT COME OUT CLEAN. HE ACCO RDINGLY SUBMITTED THAT THE ORDER OF THE CIT (A) SHOULD BE UPHELD. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE B Y BOTH THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT (A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND ON T HE BASIS OF VARIOUS SUBMISSION OF THE ASSESSEE THE ASSESSING OFFICER IN CLAUSE NO.10 OF PAGE 1 OF THE ASSESSMENT ORDER HAS MENTIONED THE NATURE OF BUSINESS AS 100% EXPORT TRADER. HOWEVER THE ASSESSING OFFICER ON P AGE 2 OF HIS ASSESSMENT ORDER HAS MENTIONED THAT ASSESSEE IS A M ANUFACTURER AS WELL AS EXPORTER OF READYMADE GARMENTS. THEREFORE WE A GREE WITH THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSING OFFICER HAS WRONGLY PRESUMED THE ASSESSEE AS A MANU FACTURER AS WELL AS EXPORTER OF READYMADE GARMENTS. HOWEVER WE NOTICE THAT DESPITE SPECIFIC OPPORTUNITIES GIVEN BY THE ASSESSING OFFIC ER THE ASSESSEE DID NOT PRODUCE THE FULL DETAILS. WE FIND DESPITE THE NOTI CE ISSUED BY THE ASSESSING OFFICER ON 11TH DECEMBER 2007 ASKING THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS MADE WITH FIVE PARTIES (AS PER PARA 3 ITA 2912/M/2009 M/S. COSMOS ============ 7 OF THE ASSESSMENT ORDER) THE ASSESSEE DID NOT BOTHE R TO ATTEND THE OFFICE OF THE ASSESSING OFFICER. WE FIND THE ASSESSING OF FICER IN THE SAID LETTER HAS WARNED THE ASSESSEE THAT NON-COMPLIANCE MAY RES ULT INTO EX-PARTE ORDER. ALTHOUGH THE LEARNED COUNSEL FOR THE ASSESS EE DREW OUR ATTENTION TO THE VARIOUS REPLIES GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER HOWEVER WE FIND THAT THERE WAS NO RESPONSE FROM TH E ASSESSEE BETWEEN 11 TH DECEMBER 2007 BEING THE DATE OF ISSUE OF LETTER BY THE ASSESSING OFFICER TILL 24TH DECEMBER 2007 I.E. THE DATE OF P ASSING OF THE ASSESSMENT ORDER. THEREFORE THE SUBMISSION OF THE LEARNED COU NSEL FOR THE ASSESSEE THAT IT HAS FILED FULL DETAILS IS NOT CORRECT. AS REGARDS THE COMPARATIVE CASES RELIED ON BY THE ASSESSING OFFICER AS WELL AS THE ASSESSEE WE FIND BOTH ARE NOT COMPARABLE. FINANCIAL RESULTS OF M/S SHAH ORIGINALS AND M/S ANIL L SHAH AS RELIED ON BY THE ASSESSING OFFICER C ANNOT BE COMPARED WITH THAT OF THE ASSESSEE SINCE THEY ARE ONLY EXPORTER O F GARMENTS WHEREAS ASSESSEE DEALS IN GARMENTS AS WELL AS SALE OF UTENS ILS. SIMILARLY THE FINANCIAL RESULTS IN THE CASE OF M/S BILLION EXPORT S AND GANESH GARMENTS RELIED ON BY THE ASSESSEE ALSO CANNOT BE COMPARED W ITH THAT OF THE ASSESSEE COMPANY SINCE NEITHER THE TURNOVER IS EQU IVALENT TO THAT OF THE ASSESSEE NOR THE ASSESSMENT YEAR OF EITHER PARTY RE LATES TO ASSESSMENT YEAR 2005-06. THEREFORE THE SAME ALSO CANNOT BE C OMPARED. 11. WE FIND FROM THE STATEMENT SHOWING COMPARATIVE GP AND NET PROFIT RATIO FILED BY THE ASSESSEE FOR 3 YEARS THAT THE AS SESSEE HAS SHOWN GP RATE OF 5.70% AND NP RATE OF 0.73% FOR ASSESSMENT Y EAR 2005-06 ON A TURNOVER OF RS 10 51 00 130/- AS AGAINST THE GP RAT E OF 11.85% AND NET PROFIT 0.81% DURING ASSESSMENT YEAR 2006-07 ON TURN OVER OF RS 4 42 61 681/-. SIMILARLY THE ASSESSEE DURING ASS ESSMENT YEAR 2007-08 HAS SHOWN GP RATE OF 11.32% AND NET PROFIT AT 1.14% ON A TURNOVER OF RS 6 37 98 961/-. THUS WE FIND THE GP RATE AND NET P ROFIT RATE FOR THE ASSESSMENT YEAR 2005-06 IS MUCH LESS THAN THAT OF T HE ASSESSMENT YEAR 2006-07 AND 2007-08. THEREFORE UNDER THESE CIRCUM STANCES ADOPTION OF GP RATE @ 15% OF THE TURNOVER APPEARS TO BE ON THE HIGHER SIDE ESPECIALLY WHEN THE ACCOUNTS OF THE ASSESSEE FOR THE ASSESSMEN T YEAR 2007-08 WAS SCRUTINISED BY THE ASSESSING OFFICER AND THE BOOK R ESULTS WERE ACCEPTED IN THE ORDER PASSED U/S 143(3). HOWEVER AT THE SAME TIME SINCE THE ASSESSEE DID NOT PRODUCE THE FULL DETAILS AND ABSTA INED FROM APPEARING ITA 2912/M/2009 M/S. COSMOS ============ 8 BEFORE THE ASSESSING OFFICER DESPITE SPECIFIC INSTR UCTION GIVEN BY THE ASSESSING OFFICER THAT NON APPEARANCE MAY ATTRACT E X-PARTE ASSESSMENT THEREFORE THE BOOK RESULTS SIMPLY CANNOT BE ACCEPT ED. 12. CONSIDERING THE TOTALITY OF THE FACTS OF THE CA SE AND CONSIDERING THE FACT THAT THE TURNOVER DURING ASSESSMENT YEAR 2005- 06 IS 10.51 CORES AS AGAINST 6.38 CRORES DURING ASSESSMENT YEAR 2007-08 WHERE THE ACCOUNTS OF THE ASSESSEE ARE ACCEPTED WITH THE GP RATE OF 11 .32% AND NET PROFIT RATE OF 1.14% WE ARE OF THE CONSIDERED OPINION THA T ADOPTION OF GP RATE OF 8% FOR THE ASSESSMENT YEAR 2005-06 WILL MEET THE ENDS OF JUSTICE. WE HOLD AND DIRECT ACCORDINGLY. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PARTLY ALLOWED. 13. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 7 TH DAY OF MAY 2010. SD/- (D MANMOHAN) VICE PRESIDENT SD/- (R K PANDA) ACCOUNTANT MEMBER MUMBAI DATE: 7 TH MAY 2010 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-XXIV MUMBAI. 4) THE CIT -24 MUMBAI. 5) THE D.R. C BENCH ITAT MUMBAI. BY ORDER ASST. REGISTRAR ITAT MUMBAI TPRAO