that
in the earlier years the turnover was very high, but subsequently
the turnover has decreased drastically and therefore, fixed cost
could not be reduced ... fact on record to pin point that fixed expenditure coupled with
decreased turnover has led to decrease in profit.
5
M/s. S.K. Jain
compared to 2
preceding years, there is also a substantial decrease in turnover as compared
to the immediately preceding year
profit
has decreased by 1.87%, whereas the employee cost increased by
13.46 %. Despite steep decrease in turnover, with almost same
amount of overhead costs ... there is decrease in returned income for A.Y. 2013-14. The comparative table
containing assessment year, turnover, net profit, direct expenses like material
consumption
material price and decrease in sale price due to tough competition.
Further, he submitted that looking to the volume of turnover, the activity
of ready ... Profit was due to increase in the cost of raw-
material and decrease in sale realization. We find that the AO did not
give
linked with the sales and with every increase / decrease in the
sale, such expenditure also increase / decrease e.g. Transportation, Hamali Wages ... there can`t be any situation
where despite there being huge turnover around Rs. 30 crore yet however, not a
single penny on account
cannot be known at the time of the agreement
what the turnover or profits will be over a period of
years. In similar interpretation ... lump sum, therefore, the same can increase or decrease
on the basis of turnover. It is also pertinent to note that
the above expenditure
terms of percentage of the profit there was decrease
from 1.15% to 0.93% of the total turnover.
-8-
4.8 In view of above ... consideration in comparison to the earlier year but some expenses were
also decreased in comparison to the earlier year. As such all the
expenses were
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
simply stated that the G.P. ratio is decreased due to decline in sales
turnover and increase in purchase cost of raw material
Profit was due to increase in the
cost of raw material and decrease in sale realization. We
find that the AO did not give ... there is increase in turnover, therefore the gross
profit ought to have been increased instead of
decreasing. We are of the view that such reasoning
