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
that this is an
admitted fact that there is a suppression of turnover. Therefore, that
itself is sufficient reason for rejection of books of account ... books of account, the
admitted facts are that there is suppression of turnover. We find that
this sole reason is sufficient for rejection of books
assessee has submitted
that the turnover of the assessee is Rs.86 Crores whereas the turnover of the
Laxmi Machine Works Ltd. is Rs.1745 ... 7861/Mum/2011) and submitted that while
considering the issue of turnover filter in case of ITES the Tribunal observed
that the concept of economy
further
argued that the sales turnover had increased by 14.18% but the
manufacturing sales had in fact decreased by 4.94% as the appellant had
begun
Learned AR
has also argued that due to substantial increase in turnover there was
a slight deduction in the profit margin which was offered ... both the sides, we are also of
the view that the marginal decrease in the gross profit ratio was
properly explained by the assessee; hence
that assessee has not
explained the decrease in GP from 8.45% to 5.88%. Only apparent
explanation is that turnover of the assessee has increased three
