PANSARI GEMS INTERNATIONAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) HEARD on question of admission as well as interim stay.

(2.) THE appeal has been preferred under Section 260A of the Income Tax Act, 1961, questioning the order dated 26.10.2009 passed by CIT(A) and order dated 19.03.2010 passed by the ITAT.For the assessment year 2006-07, the Assessing Officer applied gross profit rate of 19.43% as against the gross profit rate of 15.79% declared by the assessee. The CIT(A) upheld the application of gross profit rate @ 17%.The Revenue filed an appeal before the ITAT against the reduction in comparison to gross profit of 17% as against 19.43%, while the assessee in appeal raised the question of gross profit rate of 15.79% declared by it instead of 17% determined by the CIT(A).The question involved in both the appeals before ITAT was with respect to gross profit rate, the ITAT, after considering all the facts and circumstances of the case, arrived at the finding of gross profit rate of 17% to be reasonable. The appeals of Revenue as well as assessee had been dismissed by the ITAT. Consequently, the assessee has come up in the present appeal before us.

(3.) AFTER considering submissions of counsel appearing on behalf of the appellant, we find that discussion made by the ITAT is appropriate. The ITAT has taken into consideration the various factors, on which the gross profit rate is dependent, i.e. on the cost of purchases and sales. The assessee had filed a chart showing purchases and sales of 35 items. In these items, the rate of profit has varied from 6.32% to 26.45%.The gross profit on sales to the extent of Rs. 59,40,181.00 is around 13%.The total turnover during the year under reference is Rs. 8.86 crores. The ITAT has held that gross profit rate does not depend on the basis of specification of item, but it depends upon the quality, shine etc. The assessee has earned gross profit varied from 6.32% to 26.45%, but from the chart filed by the assessee, it cannot be concluded that gross profit rate declared by the assessee was correct. AO has found that purchases were not fully verifiable. The books of accounts were rejected for various reasons. Previous year also gross profit rate was 18.87% and this year, it has been accepted at 17% by the CIT(A) and the order passed by the CIT(A) has been affirmed by the ITAT. In view of the reasons assigned by the CIT(A) as well as the ITAT in its orders, we find that no substantial question of law arises in the present appeal. The facts of the case and the evidence have been properly appreciated by the CIT(A) as well as the ITAT.