sale of
licensed products and was directly linked with the amount of
turnover.
29. Before us, Ld. Counsel relied upon catena of judgment wherein
similar ... would determine the extent of royalty to be paid and it
would decrease or increase every year depending upon the
decrease or increase
consumption of raw material is more the gross profit ratio
would decrease. But in the case of the assessee the results are
reverse when ... presumed that in
case the .turnover of any business goes up, the GP always goes
down and if the turnover goes down the GP will
segment of the assessee was enhanced by about
127% whereas the overall turnover in manufacturing segment
had gone down by 50%. It was further submitted ... assessee incurred substantial losses due to
lower capacity utilization and a substantial decrease in its Sales.
26 ITA no. 1790, 1201/Del/2014
Devki Devi Foundation, New Delhi vs Dit (Exemptions), New Delhi on 22 October, 2019
IN
from its investments in developing the value of a
trademark from its turnover and market share where
it has a long-term contract of sole distribution ... additional return from
the owner of the trademark, perhaps through a
decrease in the purchase price of the product or a
reduction in royalty rate
fixed assets, stating that
the ratio of such intangibles to its turnover is around 5% only, which is
not material enough for influencing the pricing ... performance of the company, contrary to
which, the profitability has only decreased in the F.Y 2009-10 as
compared
from its investments in developing the value of a trademark
from its turnover and market share where it has a long-term
contract of sole ... additional return from the owner of the trademark, perhaps
through a decrease in the purchase price of the product or a
reduction in royalty rate
turnover was Rs.106,66,34,514/-.
The G.P. was 0.51% and net profit was at 0.02% whereas the assessee
declared his turnover ... immediate preceding year. The AO asked the assessee for the
reasons for decrease in profit margin rate. The assessee could not offer any
satisfactory explanation
fall by 1.89%. The AO disallowed 0.50%
decrease in gross profit ratio of sales accordingly a disallowance of Rs.
29,65,305/- was made ... Workshop (Net) 3011895 4073408 3779046
Incentive (Net) 3496887 5527666 5167690
Turnover (A) 494087805 361680522 602007751
Gross Profit (C) 7739549 15484843 14362690
GP Ratio
that
turnover of the assessee in the assessment year under
appeal is higher as compared to earlier year, but, there is a
substantial decrease
