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2019 (5) TMI 1111 - ITAT KOLKATAAssessment of income - gross profit v/s net profit of suppressed sales - survey u/s 133A - HELD THAT:- As relying on SHRI HARIRAM BHAMBHANI [2015 (2) TMI 907 - BOMBAY HIGH COURT] and BALCHAND AJIT KUMAR. [2003 (4) TMI 76 - MADHYA PRADESH HIGH COURT] we direct the Assessing Officer to assess the income from undisclosed sales in question by applying the net profit rate in place of the “gross profit rate” undisclosed sales. The net profit rate shall be that which the assessee had disclosed in its regular books of account for the said Assessment Year on recorded sales. In the result, this ground of the assessee is allowed in part. Disallowance u/s 40A(3) and Section 40(a)(ia) - when profits have been estimated as a percentage of turnover, in the case of the assessee - HELD THAT:- As decided in M/S PRADEEP SINGH WAZIR VERSUS COMMISSIONER OF INCOME TAX AND ANR. [2017 (3) TMI 1268 - SUPREME COURT] the income of the assessee on the total contract receipts had been reached at by applying the net rate of profit after reduction and, thus, no further addition could be made u/s 40(a)(ia). No contrary decisions is brought to our notice by the D/R. We delete the disallowance made u/s 40A(3) and 40(a)(ia) as in this case, the income has been estimated by the AO. Hence, we allow this ground of the assessee. Taxation of excess stock found by the revenue during the course of survey u/s 131 - HELD THAT:- As relying on M/S. SUBARNA RICE MILL VERSUS INCOME-TAX OFFICER, WD-2 (3) , BURDWAN [2015 (7) TMI 522 - ITAT KOLKATA] we direct the AO to tax only the gross profit embedded in the excess stock found for the Assessment Year. The balance addition is hereby deleted. In the result this ground of the assessee is allowed in part. Also see SMT. MADHU CHHANDA SIRKAR AND VICE-VERSA. [2018 (9) TMI 1775 - ITAT KOLKATA]
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