Case Law Details
ACIT Vs Ashish Bansal (ITAT Delhi)
In the case of ACIT vs. Ashish Bansal [ITA No.7427/Del/2018 dated June 2, 2023], the ITAT, New Delhi dismissed the Appeal of the Revenue Department. The ITAT upheld the decision of the Commissioner, who had correctly deleted the addition made by the Assessing Officer. The Assessing Officer had added the differential margin to the assessee’s income based solely on a comparison between industry gross margin and the assessee’s gross margin, without conducting a thorough analysis of the assessee’s business strategy.
Facts
Ashish Bansal (“the Respondent”) is engaged in the business of wholesale trading of gold and silver bullion, manufacturing and selling gold and gold made ornaments. For the Assessment Year 2015-16 the gross profit rate (“GP Rate”) of Respondent reduced to 0.41% as compared to GP Rate of 8.59% in the Assessment Year 2014-15, while the turnover has increased from INR 8.23 crores to INR 292 crores in Assessment year 2015-16 when compared to Assessment year 2014-15. The Assessing Officer (“the AO”) issued a Show Cause Notice (“SCN”) ordering to provide separate working of Gross Profit, Net Profit of silver, gold bullion and manufacture of gold ornaments.
The Respondent in its reply inter alia stated that the reason for steep fall in his GP rate was due to change in business strategy by decreasing Gross margin which resulted in higher turnover.
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