fixing GP% at 7% by taking cue from the part of
turnover (of earlier part of the year) of 5.1% is not sustainable ... years, including relevant financial year) is as under:-
Total Turnover 250758982 736968737 2595778118
Increase/Decrease in -59959722 50871881 23178182
Stock
Total 190799260 787840618 2618956300
Expenses
will appreciate the
fact that with increase in turnover, the net profit ratio is bound to
decrease. This is because of the facts that ... tenders. Similarly,
overhead expenses goes up sharply when we increase the turnover
(Employment of technical personnel with high salaries,
wastage/leakages due to lack
margin business increases, then the overall profitability
decreases and vice versa.
g) The amount of turnover during the year under consideration is
highest in comparison
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 ... comparison to the earlier year, but in the context of
the reduced turnover in the current year, the increased expenditure
partly explains the negative
years
the percentage of wages to turnover has been from 2.59% to 5% depending on the
total turnover. It is seen that in accounting year ... turnover of 5.28 crores which shows that in spite of
a huge increase in turnover the wages have actually decreased compared to the
last
same. The assessee is engaged in silk saree trading and achieved turnover of
Rs.1,66,79,636/-. The AO, in an arbitrary manner, accepted ... very next AY there is a decrease in the sales
turnover and consequently, the cash deposit would also be less in comparison
to the subject
assessment
proceedings, assessee was asked to explain decreasing in GP when
there was an increase in turnover. It was also observed by the AO
that
selected for complete
scrutiny under CASS for the reasons:
i. Low turnover in comparison to outward foreign
remittance;
ii. Foreign remittance made to persons located ... explanation. The
Assessing Officer recorded that turnover increased from Rs. 84
crores to Rs. 109 crores, trade receivables decreased from Rs.
7.65 crores
justified, as the turnover of assessee has increased decreasing the profit margin.
Having considered facts and circumstances of the case I find that the assessee
2019
M/s. Devu tools Pvt Ltd., Mumbai.
-6-
Income Turnover 2008 2007 2006 2005 2004
Sales ... Decreases in Stock
Gross Profit Turnover
. Bogus purchases allowed 52.20% 48.48% 51.94% 35.52% 40.98%
As expenses
Net Profit/Turnover
Bogus purchases allowed
