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
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
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
simply stated that the G.P. ratio is decreased due to decline in sales
turnover and increase in purchase cost of raw material
earlier year. Further, the labour charges as a
percentage of turnover have also decreased to 87.87% in the current
year as compared
total turnover of Rs.6,15,15,472/-. The
Assessing Officer produced following chart for comparison:-
Year Turnover Gross Profit G.P. margin ... consumption was at Rs.85,89,851/-. Total turnover on the
other hand had decreased. The AO required the assessee to give details
there was increase in manufacturing expenses by
1.92% whereas there was a decrease of cost of goods sold by 1.41%
and thus there ... this year and production of last year but the turnover has
been decreased substantially which has been stated because of fall in
selling rate
During the assessment proceedings the AO found that the
turnover of the assessee has decreased as compared to the
preceding year, however, indirect expenses were ... found that expenses
incurred in the preceding assessment year were 2.89% on turnover
but in the assessment year under appeal
artificially increased or decreased like in the case of deduction Under Section 80J being based on proportion of turnover. It is significant to note that
such
the amount of commission expenses decreased in the year under consideration
which was paid against the turnover of Rs. 2633.58 lacs for the year
