issue. It is the case of the assessee that since the
turnover has increased in the present year, therefore, G.P. rate ... Officer and the gross profit of the year has decreased to
2.58% from 2.82% while turnover has increased by 72.95% as
compared to preceding year
record. At the outset, we note that the assessee
has declared its turnover in the subsequent assessment year 2014-15 at
rupees 13.87 crores ... year under consideration. Generally, when the turnover
of the assessee increases than the margin decreases, it is because it is
assumed that the assessee
noticed that
gross profit of the assessee has been decreased from 34.47% of the
total turnover to 26.16% of the turnover whereas turnover has
increased
income is
assessed at the rate of 3% of the sales turnover of the current year in the light of
book profit declared ... last year. It is commonly observed that when turnover is
increased the profit margin is generally decreased. The assessed income of the
assessee
ratio for the last three A.Ys is as under:
AY. Turnover G.P. rate N.P. rate
(Rs.)
G.P. (Rs.) G.P. rate ... turnover has exceeded by 3 times
compared to A. Y.2006-07. This is one of the reasons that when
turnover increases profit ratio decreases
ratio of the assessee was decreasing due to steep increase in the labour
charges and increase in the turnover, and the AO applied ... case it is noticed that the
turnover of the assessee was increasing year after year but there was decrease in
the net profit rate consistently
simply stated that the G.P. ratio is decreased due to decline in sales
turnover and increase in purchase cost of raw material
turnover
of the appellant, cost of certain raw materials has gone up sharply
and average realisations from finished goods have decreased
between ... decline in
turnover and the cost of certain raw materials have gone up
sharply and the average realization from finished goods have
decreased between
admitted fact that there was a tremendous increase in the
turnover of the assessee which increased from Rs. 5 Crore in the earlier
year ... earlier year, the increase in
the turnover may be a reason for slight decrease in the gross profit rate.
In the present case, the Assessing
indicated that the net profit of assessee was decreased from
.23% of total turnover to .13% in this year due to increase in this expense
