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2004 (9) TMI 15 - PUNJAB AND HARYANA HIGH COURTWhat should be the gross profit rate – finding of fact – VDIS - Tribunal rejected Revenue's contention that the income of the assessee be determined by application of a net profit rate of 20 %, has been rejected. - AO had rejected the books of the assessee and determined the income from bakery business by applying a net profit rate of 20 per cent, to the declared sales of Rs. 2,28,60,250. The basis for applying a net profit rate of 20 per cent, was that the assessee had made a declaration u/s 68(2) of the Voluntary Disclosure of Income Scheme, 1997, in which a sum of Rs. 5 lakhs had been offered for assessment on undeclared sale of Rs. 19,10,000 - amount of Rs. 5 lakhs surrendered under the Scheme was not only in respect of profits earned on the sales of Rs. 19,10,000. In the declaration filed under the Scheme, it had been clearly stated that the declared amount covered the gross margin after including fixed expenses. It is, therefore, clear that the declared amount was not entirely on account of income from undisclosed sales although it covered the said income also. Thus, it could not be a guide for determining the rate applicable to the sales as declared in the books of account. – Hence, Tribunal was justified in upholding the application of gross profit rate of 22 %. The findings recorded by the Tribunal are pure findings of facts. What should be the gross profit rate in a given case does not give rise to any legal issue. – Revenue’s appeal is dismissed in limine.
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