About decrease in gross profit ratio, the ld.PCIT noticed that during
the year under consideration, the assessee -firm has total turnover ... decrease in gross profit ratio, submitted by the assessee, should not be
accepted because during the year under consideration, the assessee- firm has
total turnover
About decrease in gross profit ratio, the ld.PCIT noticed that during
the year under consideration, the assessee -firm has total turnover ... decrease in gross profit ratio, submitted by the assessee, should not be
accepted because during the year under consideration, the assessee- firm has
total turnover
evident from the above table that the total cash deposits have decreased as compared
to the preceding year. The only reason for doubt ... assessee firm is as under:
Particulars AY 2016-17 AY 2017-18
Turnover 4,32,77,865 4,66,41,222
Cash deposits
against 91 % in the immediately preceding year. Thus, there appeared an abnormal
decrease in the yield of finished products during the year under consideration ... copper scrap in the lesser turnover where as in the current year
on the increased turnover it has purchased lower copper scrap of 11.65 lakh
company have decreased by 69%. But, fact remains
that the annual report of the company is available in public domain
and its turnover has marginally ... change in financial results and the
industrial sales of the company has decreased by 69%, when
compared to previous financial year. The Ld. DRP further
Gross Turnover 650.28 598.49 525.45 412.14
Expenses as %
of Gross
Turnover Percentage ( % )
Payment to and
Provisions for
Employees 6.66 6.58 6.42 10.30
Travelling,
Conveyance ... These figures demonstrate that the expenses on Employees cost has
shown decrease from 10.30% in year 2005-06 (i.e. the year in which
outsourcing
observed that the turnover for the year under consideration
has increased from the previous years, however the GP rate
has decreased from the preceding previous ... further submitted that in normal
circumstances GP rate is inversely related to turnover, i.e. increase in
turnover usually results in lower GP rate
products, even the sale
price decreased in comparison to the preceding year. Moreover, the
appellant's turnover increased from 11.60 crores
last year. In appellate proceedings AR has not
filed proper justification for decrease in G.P. rate to 4.64% however I find that
GP rate ... higher side, GP rate of 20% of declared
turnover is applied. Assessee gets resultant relief. This ground of appeal is
partly allowed."
Ground
Governor India
(P) Ltd. [2009] 312 ITR 254 (SC)
2.6 REASONS FOR DECREASE IN GROSS PROFIT PERCENTAGE
2.6.i Assessee company also effectively marketed ... offering competitive rates which is visible from the fact that the
turnover increased from Rs. 57.11 crores during preceding
year to Rs. 94.38 crores
