ACIT 12(3), MUMBAI v. KAYSONS, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI R.S. SYAL (AM) AND SMT ASHA VIJAYARAGHA VAN (JM) ITA NO. 6328/MUM/2008 (ASSESSMENT YEAR-2003-04) M/S. KAYSONS 4 STADIUM HOUSE VEER NARIMAN ROAD CHURCHGATE MUMBAI-400 020 PAN-ADFK 7767R VS. THE ACIT CENTRAL CIRCLE 20 AAYAKAR BHAVAN MUMBAI-400 020 ITA NO. 7030/MUM/2008 (ASSESSMENT YEAR-2003-04) THE ACIT CENTRAL CIRCLE 20 AAYAKAR BHAVAN MUMBAI-400 020 VS. M/S. KAYSONS 4 STADIUM HOUSE VEER NARIMAN ROAD CHURCHGATE MUMBAI-400 020 PAN-ADFK 7767R (APPELLANT) (RESPONDENT) ASSESSEE BY: DEPARTMENT BY: SHRI H.S. RAHEJA SHRI SHRAVAN KUMAR O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS SET OF CROSS APPEALS CONSISTING OF ONE APPEAL FILED BY THE ASSESSEE AND THE OTHER APPEAL FILED BY THE REVENUE IS DIRECT ED AGAINST THE ORDER DATED 19.9.2008 PASSED BY THE LD. CIT(A)XII IN THE MATTER OF ASSESSMENT U/S. 143(3) OF THE I.T. ACT 1961 FOR THE A.Y.2003-04. AS THESE APPEALS WERE HEARD TOGETHER AND INVOLVED CONNECTED ISSUES BOTH OF THESE APPEALS ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER . 2. THE ASSESEE IS A DEALER IN VARIOUS KINDS OF DRES SES. THEY RETURNED GROSS PROFIT AT 24%. THE ASSESSING OFFICER ESTIMATE D THE GROSS PROFITS AT 29% THE SAME AS RETURNED BY THE ASSESSEE FOR THE E ARLIER YEAR. ON APPEAL ITA NO. 7030 & 6328/M/08 2 THE LD.CIT(A) DIRECTED THAT GROSS PROFIT OF THE BUS INESS OF THE ASSESSEE BE ADOPTED AT 26%. THE ASSESSEE AND THE REVENUE HAS CO ME UP ON APPEAL AGAINST THE ORDER OF THE LD.CIT(A). 3. IN THE COURSE OF ASSESSMENT THE ASSESSING OFFIC ER NOTICED THAT THE ASSESSEE WAS NOT MAINTAINING STOCK REGISTER. IT WAS STATED THAT AT THE END OF THE FINANCIAL YEAR STOCK INVENTORY IS MADE AFTER PH YSICAL VERIFICATION OF THE GOODS AVAILABLE. FURTHER MAJORITY OF THE SALES ARE SUPPORTED WITH SELF MADE CASH VOUCHERS. THE SALES VOUCHERS ARE NOT GIVING A NY DESCRIPTIONS OF GOODS SOLD. HOWEVER IT IS SEEN THAT THE PURCHASE BILLS H AVE DETAILS OF GOODS PURCHASED. IN THE CIRCUMSTANCES DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO FURNISH QUANT ITATIVE TALLY OF STOCK ITEM WISE AND QUALITY WISE. THEY FURNISHED ONLY DE TAILS OF STOCK WITH VALUE AS PER THE CLOSING STOCK INVENTORY TAKEN AT THE END OF THE YEAR. HENCE THE ASSESSEE WAS AGAIN ASKED TO FURNISH DETAILS AS PER LETTER DATED 31 ST JANUARY 2006 IN THE FOLLOWING FORMAT: ITEM OPENING STOCK PURCHASE SA LES CLOSING STOCK __________________________________________________ ________________________ QTY. VALUE QTY. VA LUE QTY. VALUE QTY. VALUE 4. THE ASSESSEE HAS STATED THAT THE ASSESSEE IS NO T ABLE TO FURNISH QUANTITATIVE TALLY OF STOCK AS CALLED FOR SINCE THE ASSESSEE HAS NOT MAINTAINED ANY RECORDS OF DAY TO DAY STOCK TALLY OF EACH ITEM. IN THE ASSESSEES CASE AS IT IS DEALING IN MANY ITEMS IT I S NOT POSSIBLE TO MAINTAIN SUCH DETAILS. IN THE CIRCUMSTANCES FROM THE PURCHA SE BILLS PRODUCED 15 BILLS WERE IDENTIFIED AND THE ASSESSEE WAS ASKED TO CORRELATE THE SALES VOUCHERS AGAINST THE SAID BILLS OR GIVE DETAILS OF THE SAID BILLS AVAILABLE IN THE CLOSING STOCK DETAILS. THE ASSESSEE VIDE ITS LETTE R DATED 17.2.2006 MADE FOLLOWING SUBMISSION IN THIS MATTER. A) WHILE EXAMINING THE BOOKS OF ACCOUNT BILLS OF PURCHASES AND SALES ALL OTHER VOUCHERS AND THE BANK STATEMENTS YOU HAVE PICKED UP 15 BILLS OF PURCHASE AND ASKED FOR CORRELATION OF THE SAME WITH THE SALES. THE BILLS OF PURCHASE AS WELL BE SEEN BY YOU DO N OT GIVE IN DETAILS ANY DESCRIPTION OF THE NATURE AND VERIETY OF PURCHASES FOR EXAMPLE THE ITA NO. 7030 & 6328/M/08 3 PURCHASE BILLS READ 25 SAREES OR 10 SHAWLS OR 55 KURTIS OR 6 DUPPATTA OR FABRICS 20 METRES OR 3 SUIT LENGHTH S ETC. EVEN WITHIN THESE BILLS 5 SAREES FOR EXAMPLE WOULD BE DIFFER ENT SAREES OF DIFFERENT RATES AND DIFFERENT KINDS FASHION AND MATERIAL. S OME MAY BE WITH DESIGN AND SOME MAY BE PLAIN. THESE ARE ITEMS PICK ED UP BY THE PARTNER OR ORDERED OVER THE PHONE AND THE BILLS COME FROM T HE VENDORS WITHOUT GIVING ANY DETAILED SPECIFICATION OF EACH AND EVERY INDIVIDUAL ITEM. THE VOLUME OF TRADE OF THE ASSESSEE IS SO LARGE THAT IT IS PHYSICALLY IMPOSSIBLE FOR THE VENDOR OR FOR THE ASSESSEE TO MAKE A DETAIL ED DESCRIPTION OF EACH AND EVERY ITEM OF PURCHASE. THE CONCERN OF THE VEN DOR IS TO GET HIS SALE PROCEEDS AND AS FAR AS THE ASSESSEE IS CONCERNED TH E GOODS WHEN RECEIVED ARE APPROPRIATELY TAGGED AND DISPLAYED FOR SALE. EVEN THE SHAWLS KURTIS DUPPATTAS FABRICS SUITS ETC COME IN A SIMILAR FASHION AND THE PURCHASE BILLS GENERALLY DO NOT MENTION ANY DETAILED DESCRIPTION WITH REGARD TO THE PATTERN AND DESIGN COLOUR OR AN Y OTHER MODE OF IDENTIFICATION. AS SUCH IN THE ABOVE ABSENCE OF AN Y SUCH CLARITY WITH REGARD TO PURCHASE BILL YOU WILL AGREE THAT IT IS P HYSICALLY IMPOSSIBLE FOR THE ASSESSEE TO CORRELATE THE 15 PURCHASE BILLS PIC KED UP BY YOU WITH THE SALES AND CLOSING STOCK . HOWEVER AT THE END OF EAC H ACCOUNTING YEAR A PHYSICAL CLOSING STOCK TALLY IS MADE BY THE PARTNE RS FOR WHICH PURPOSE A DETAILED INVENTORY IS MADE WITH REGARD TO EACH PIEC E OF FABRICS SAREES LEHENGA SHAWL KURTI DUPPATTA SCARF ETC. THIS D ETAILED INVENTORY NUMBER WISE ITEM WISE AND VALUE WISE HAS ALREADY B EEN FILED WITH YOU. LOOKING TO THE NATURE OF TRADE IF THE ASSESSEE AND THE HANDICAP FACED AS NO CLEAR SPECIFICATION IS GIVEN IN THE PURCHASE BIL L I PRAY TO YOU TO KINDLY ACCEPT THE CLOSING STOCK AS PER THE DETAILS FILED W ITH YOU AND ACCEPT THE RETURNED INCOME. 5. IN VIEW OF THE ABOVE SUBMISSION SINCE THE DETAIL S OF SALES AND DETAILS OF THE CLOSING STOCK ARE NOT VERIFIABLE WITH SUPPOR TING QUANTITATIVE STOCK TALLYING DETAILS ITEM WISE AND QUALITY WISE AS REQU IRED THE BOOK RESULTS SHOWN BY THE ASSESSEE BECOME UNVERIFIABLE. THE ASS ESSEE WAS THEREFORE ASKED TO EXPLAIN THE REASONS FOR FALL IN GP VIDE TH IS OFFICE LETTER DATED 20.2.2006. THE ASSESSEE IN A LETTER DATED NIL WHICH WAS FILED ON 27 TH FEBRUARY 2006 TRIED TO EXPLAIN THE REASONS FOR FALL IN GP RATIO. 5.1. THE ASSESSEE STATED AS FOLLOWS: THE TURNOVER FOR ASST. YEAR 2002-03 IS SUBSTANTIALL Y LOWER AS COMPARED TO TURNOVER OF ASST. YEAR 2003-04. THE IN CREASE IN TURNOVER GENERALLY RESULTS IN FALL IN GP AND THIS JUSTIFIED THE FALL IN GP FOR THE YEAR 2003-04. THE RESPECTIVE TURNOVER ARE AS UNDER : 2002-03 1.69 CRORES 2003-04 2.17 CRORES DIFF. RS. 48.10 LAKHS ITA NO. 7030 & 6328/M/08 4 THIS YEAR THE ASSESSEE HAS VENTURED TO SEE THE EFFE CT OF PROFIT ON INCREASED SALES AND FOR THE SAME IT HAS PARTIALLY S ACRIFICED THE GP. FURTHER DURING THE YEAR THE ASSESSEE HAS STARTED A BRANCH AT SANTACRUZ AND IN ORDER TO ESTABLISH THIS BRANCH AND MAKE PEOP LE AWARE OF THEIR PRESENCE IN THE SUBURBS THEY HAVE MARKETED OUT GOO DS AT A LESSER PROFIT WHICH HAS CONTRIBUTED TO THE FALL IN GP. T HE SALES FROM SANTACRUZ BRANCH DURING THE YEAR FROM NO.2002 TO MARCH 2003 W ERE RS 27.76 LAKHS WHICH IS A SALE OF RS 5.58 LAKHS PER MONTH AN D THIS CONSTITUTES 13% OF THE TOTAL TURNOVER. FOR THIS ADDITIONAL TUR NOVER AS ALSO THE ADDITIONAL TURNOVER FROM THE MAIN SHOP OF ABOUT RS 20.34 LAKHS (1.89 CRORES 1.69 CRORES) AS COMPARED TO THE PREVIOUS Y EAR IT HAD GONE TO REDUCE THE MARGINS RESULTING IN THE FALL IN GP OF A BOUT 4%. FOR THE PREVIOUS YEAR IT WAS SEEN THERE IS NO SATISFACTORY RESPONSE FROM THE CUSTOMER. THUS IN ORDER TO COVER UP THE ESTABLISHM ENT COST WHICH IS FIXED IN NATURE LIKE ELECTRICITY TELEPHONE SALARY RENT ETC. IT HAD ALSO INCREASED ITS PROFIT MARGIN AND SELLING PRICE. TH IS WILL BE EVIDENT THAT FOR THE ASST/. YEAR 2001-02 THE TURNOVER WAS RS .3. 11 CRORES AND THE GP WAS 14.50% WHICH HAS BEEN ACCEPTED BY THE DEPART MENT IN SPITE OF THIS BEING THE YEAR OF SEARCH. THEREAFTER IT HAS I NCREASED ITS PROFIT MARGIN TO YIELD A GP OF 29% BUT ITS SALES FELL FROM 3.11 CRORES TO 1.69 CRORES. THUS IT HAD NO OPTION BUT TO REDUCE THE GP AND INCREASE SALES. IT IS FURTHER SUBMITTED THAT BECAUSE OF ABOVE THE NET PROFIT HAS INCREASED THIS YEAR WHILE COMPARING THE NET PROFIT OF LAST TW O YEAR. COMPARISON CANNOT BE MADE WITH A SINGLE YEAR AND IT IS ESSENTI AL TO SEE THE PAST 2 3 YEARS. THE RESULT OF AY 2001-02 IS 14.50% GP AN D THE SAME IS ACCEPTED IN SPITE OF A SEARCH. NO INCRIMINATING M ATERIAL OR EXCESS STOCK HAS BEEN FOUND IN SEARCH WHICH WILL ALSO JUSTIFY TH AT THE STOCKS MAINTAINED BY THE ASSESSEE ARE CORRECT AND VERIFIAB LE. COMPARISON WITH THE PREVIOUS YEAR ALSO CANNOT BE MADE SINCE TH E SANTACRUZ SHOP WAS AN ABSOLUTELY A NEW EXPERIMENT FOR THE ASSESSE E FOR WHICH THE ASSESSEE KEPT RELATIVELY LOW PROFIT MARGIN TO GRAB CUSTOMERS IN THE VICINITY AND COMPETE WITH THE ESTABLISHED TRADERS I N THE LOCALITY. THE IDEA WAS TO ATTRACT MORE CUSTOMERS TO STEP INTO T HE SHOP AND BOOST THE SALES SO THAT EXPERIMENT RESULT INTO AN INDEPENDENT PROFIT CENTRE. THE ASSESSEE HAD A FEAR IN ITS MIND THAT IF THE SAME PR OFIT MARGIN WHICH IS THERE AT CHURCHGATE IS KEPT AT SANTACRUZ THEY MAY N OT ACHIEVE ITS OBJECT. THE REPRESENTATIVE FURTHER FURNISHED ALONG WITH ABO VE LETTER A CHART OF THE PURCHASES WITH SALES AGAINST THE 9 OUT OF 13 PURCHASE BILLS (2 ARE FOR FABRIC UTILIZED) ASKED FOR CORRELATING W ITH SALES BILLS STATING THAT THEY HAVE MADE AN ATTEMPT TO CORRELATE TO A MA JOR EXTENT. HOWEVER HE HAS NOT CLAIMED THAT THEY ARE THE ACTUAL SALES V OUCHERS RELATING TO THE PURCHASE BILLS REFERRED TO WITH ANY JUSTIFICAT ION THUS MAKING THEM ONLY APPROXIMATE. AS REGARD THE GP RATIO OF 30.13% REFERRED TO IN THE CASE OF ROOP MILAN A SHOP IN THE NEAR VICINITY OF T HE ASSESSEE THE REPRESENTATIVE HAS SOUGHT FOR THE PURCHASE BILLS EMBROIDERY BILLS AND LABOUR AND SALES BILLS OF THAT PARTY TO VERIFY THE DRESS MATERIALS DEALT IN BY THEM VIDE HIS ABOVE LETTER. ITA NO. 7030 & 6328/M/08 5 6. THE ASSESSING OFFICER CONCLUDED THAT WITH NON MA INTENANCE OF DAY TO DAY STOCK REGISTER FROM THE METHOD OF ACCOUNTING T HE CORRECT PROFITS OF BUSINESS ARE NOT DEDUCTIBLE AND HENCE THE OPERATION OF SECTION 145(3) OF THE ACT WOULD BE ATTRACTED. THE ASSESSEES FURTHER ARGU MENTS IN THE MATTER IS THAT IN THE PAST ALSO THE ASSESSEE WAS FOLLOWING SA ME METHOD OF INVENTORY OF CLOSING STOCK WHICH THE DEPARTMENT WAS ACCEPTING W AS ALSO REJECTED RELYING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS BRITISH PAINTS INDIA LTD. (1991) REPORTED IN 188 ITR 44(SC ). THE ONUS IS ON THE PART OF THE ASSESSEE TO JUSTIFY THE GROSS PROFIT RATIO DECLARED IN THE RETURN OF INCOME FILED AND SUPPORT IT WITH CORROBORATIVE DOCU MENTARY EVIDENCES SINCE THE ENTIRE FACTS ARE WITHIN THE KNOWLEDGE AND POSSE SSION OF THE ASSESSEE. SINCE THE ASSESSEE FAILED TO ESTABLISH THE CORRECTN ESS OF INCOME DECLARED IN THE RETURN OF INCOME FILED THE BOOKS OF ACCOUNTS M AINTAINED BY THE ASSESSEE CANNOT BE RELIED UPON. 7. THE REQUEST OF THE ASSESSEE FOR FURNISHING OF PU RCHASE AND SALES BILLS OF M/S ROOP MILAN FOR ITS VERIFICATION OF GOODS DEA LT WITH BY THE PARTY WHICH IS NOT ACCEDED TO AS PER THE PROVISIONS OF THE IT A CT KEEPING IN MIND THAT NO DETAILS OR INFORMATION OF ANY ASSESSEE SHOULD BE PA RTED WITH ANY OTHER PERSON. 8. IN THE ABSENCE OF SUCH DETAILS THE FALL IN GP TO 24% FROM THAT OF LAST YEAR AT 29.37% IS NOT VERIFIABLE. ACCORDINGLY THE AO ESTIMATED ASSESSEES GP RATIO AT A FLAT RATE OF 29% I.E. EQUAL TO THE GP REFLECTED IN ASSESSEES BUSINESS IN LAST YEAR WHICH WORKED OUT TO RS 62905 36/-. THE ASSESSEE HAS DECLARED GP OF RS 52 05 961/- AS AGAINST ABOVE WORK ING OF GP. HENCE AO ADDED RS 10 84 575/- TO THE TOTAL INCOME OF THE AS SESSEE TOWARDS THE DIFFERENCE IN GP. 9. ON APPEAL BEFORE THE LD. CIT(A) THE ASSESSEE OBJ ECTED TO THE AO REJECTING THE BOOKS OF ACCOUNT BY APPLYING THE PROV ISIONS OF SEC 145(3) OF THE IT ACT 1961 AND ESTIMATING THE GP AT 29%. AS AGAIN ST THE DECLARED GP OF 24%. IT WAS CONTENDED THAT THE ASSESSING OFFICER HAS OBSERVED THAT THE ITA NO. 7030 & 6328/M/08 6 ASSESSEE IS NOT MAINTAINING STOCK REGISTER AND THE ASSESSEE HAS NOT GIVEN ANY SPECIFIC REASON FOR FALL THE GP. ALSO THE ASS ESSING OFFICER IN HIS ORDER HAS DISCUSSED AT GREAT LENGTH THE REASONS FOR REJEC TING THE ASSESSEES BOOKS OF ACCOUNTS. THE ASSESSEE IN ITS SUBMISSIONS HAS SU BMITTED THAT MERELY BECAUSE THERE IS A FALL IN GP IN A PARTICULAR YEAR IT CANNOT BE SAID THAT THE BOOKS OF ACCOUNTS OF THE APPELLANT ARE NOT RELIABLE AND THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SHOW THAT THERE ARE ERRORS IN THE ACCOUNTS. THE APPELLANT HAS RELIED ON VARIOUS TRIBUNAL DECISIONS COMPARISONS CANNOT BE MADE FOR A SINGLE YEAR AND IT IS ESSENTIAL TO SEE THE PAST 2-3 YEARS; IT IS ALSO STATED BY THE APPELLANT THAT THE INCREASE IN TURNOVER GENERALLY RESULTS IN FALL IN GP. THE C OMPARISON OF TURNOVERS FOR AYS 2002-03 AND 2003-04 ARE AS UNDER:- ASST. YEAR TURNOVER DIFFERENCE 2002-03 RS 1 68 81 154/- --- 2003-04 RS. 2 16 91 503/- RS. 48 10 349/- DURING THE YEAR UNDER CONSIDERATION THE APPELLANT H AS OPENED A NEW SHOWROOM IN THE SUBURBS AND HAS VENTURED IN THE MAR KET SELLING AT LOWER PRICES WHICH HAS AGAIN CONTRIBUTED TO INCREASE IN TURNOVER BUT FALL IN GP. 10. THE LD. CIT(A) HELD AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLA NT AND ASSESSMENT ORDER. THE ASSESSING OFFICER IN HIS ORDER HAS COMPA RED THE APPELLANTS GP TO THAT OF ROOP MILAN WHICH IS TAKEN AT 30%.WHIL E COMPARING THE GP THE ASSESSING OFFICER HAD NOT TAKEN AT 30% ACCOUNT THE OTHER FACTORS LIKE QUALITY OF FABRICS DEALT PURCHASE PRICE SELLING P RICE AND OTHER ESTABLISHMENT EXPENSES ETC. THE FACT REMAINS THA T THE TURNOVER HAS INCREASED IN COMPARISON TO EARLIER YEAR AS WELL AS THE NET PROFIT. THE APPELLANT HAD OPENED A NEW SHOP AT SANTACRUZ AND HA D TO SELL GOODS AT A LOWER PRICE TO BUILD ITS CUSTOMER BASE. THE ASSES SING OFFICER ALSO HAD NOT POINTED OUT ANY SPECIFIC DEFECTS IN THE BOOKS O F ACCOUNTS. THOUGH THE ASSESSING OFFICER HAD UTILIZED THE INFORMATIONS PER TAINING TO M/S ROOP MILAN THE SAME WAS NOT SUPPLIED TO THE APPELLANT. THE ASSESSING OFFICER HAD TAKEN THE GP AT 29% BASED ON CERTAIN PRESUMPTIO NS. HOWEVER THE FACT THAT THE APPELLANT IS NOT MAINTAINING ANY STOC K REGISTER CANNOT BE IGNORED. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE IT WOULD BE FAIR AND REASONABLE IF THE GROSS PROFIT IS TAKEN AT 26%. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO RE CONPUTE THE GROSS PRO FIT AT 26% AND MAKE THE NECESSARY ADDITION ACCORDINGLY. ITA NO. 7030 & 6328/M/08 7 IN THE RESULT THE APPEAL IS PARTLY ALLOWED . 11. AGGRIEVED BOTH THE ASSESSEE AND THE REVENUE ARE ON APPEAL BEFORE US. THE ASSESSEE IS AGGRIEVED THAT THE LD. CIT(A) DETER MINING THE GP AT 26% AS AGAINST THE RETURNED RATE OF 24% INSPITE OF THEIR E XPLANATIONS FOR THE REDUCTION OF THE GP RATE. THE LD. COUNSEL FOR THE A SSESSEE SHRI H.S. RAHEJA RELIED ON THE DECISION OF ITO VS PRAKASHCHAND 100 T TJ (JD) 639 WHEREIN IT HAS BEEN HELD AS FOLLOWS: AO HAVING NOT POINTED OUT ANY SPECIFIC DEFECT IN THE ASSESSEES BOOKS OF ACCOUNT THERE WAS NO BASIS FOR REJECTING THE BOOKS OF ACCOUNT AND APPLYING A HIGHER GP RATE WITHOUT CITI NG ANY COMPARABLE CASE. 12. THE REVENUE IS ON APPEAL AGAINST THE LD. CIT(A) REDUCING THE GP RATE TO 26% FROM THE 29% ADOPTED BY THE AO. 13. WE HEARD BOTH THE PARTIES. AS HELD BY THE LD. C IT(A) THE AO ERRED IN TOTALLY REJECTING THE BOOKS OF ACCOUNTS OF THE ASSE SSEE MERELY BECAUSE THE DAY-TO-DAY STOCKS WERE NOT MAINTAINED. BUT AT THE S AME TIME THE ASSESSEE IS NOT ABLE TO WORK OUT AND RECONCILE THE STOCKS EV EN AT THE GROSS LEVEL IN TERMS OF GROUP OF DRESSES IF NOT ON THE BASIS OF IN DIVIDUAL TYPE OF DRESSES. THE SALE INVOICES DIDNT HAVE PARTICULARS OF ITEMS SOLD. FURTHER THE EXPLANATION OF THE ASSESSEE REGARDING REDUCTION IN GP RATE IS ONLY GENERAL WITHOUT REFERENCE TO ACTUAL MATERIALS/ EVIDENCE REG ARDING PURCHASES AND SALES. THE AOS COMPARISON OF THE GP OF ROOP MILAN CANNOT BE ACCEPTED WITHOUT FURTHER PARTICULARS OF THEIR BUSINESS BEING ANALYSED AND COMPARED WITH THE BUSINESS OF THE ASSESSEE. IN THE CIRCUMSTA NCE WE FIND THAT THE GP OF 26% AS ESTIMATED BY THE LD.CIT(A) IS FAIR AND EQ UITABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE WE CONFIRM THE SAME. ITA NO. 7030 & 6328/M/08 8 14. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IN ITA NO 6328/M/08 AND THE APPEAL FILED BY THE REVENUE IN ITA NO7030/M /08 ARE DISMISSED. ORDER PRONOUNCED ON THIS 23 RD DAY OF FEBRUARY 2011 SD/- SD/- (R.S. SYAL) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI DATED 23 RD FEBRUARY 2011. RJ COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR A BENCH TRUE COPY BY ORDER ASST. REGISTRAR I.T.A.T MUMBAI ITA NO. 7030 & 6328/M/08 9 DATE INITIALS 1 DRAFT DICTATED ON: 15.02.2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 18.02.2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: ______ 9 DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER: ______