Indian Kanoon - Search engine for Indian Law

10. Aggrieved by the order of A.O., assessee carried the matter before CIT (A).CIT (A) granted partial relief by holding as under:-

"6.3. I have carefully considered the facts of the case, the submissions of the appellant and the assessment order. It is observed that the turnover has reduced as compared to the preceding year i.e. it has decreased from 1.73 crores to Rs.1.22 crores. Though in percentage terms the expenses on power and fuel has increased in comparison to the earlier year, but in the context of the reduced turnover in the current year, the increased expenditure partly explains the negative GP during the year. However, I am in part agreement with the A.O. that the drastic fall in GP is not fully explained. The appellant could not produce any evidence to support his contention that one of the reasons for the fall in GP was also fluctuation in raw material prices. Considering all the facts and circumstances, in my view, it would be reasonable to adopt GP rate of 2% on total sales of Rs.122.49 lakhs thereby restricting the addition to Rs.24.5 lakhs. Ground No.3 is partly allowed."