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2016 (1) TMI 494 - AT - Income TaxEstimation of income - whether the gross profit rate (GP rate) or the net Profit rate (NP rate) should be adopted - Held that:- A.O proceeded to adopt the GP rate at 6.19% and did not grant the deduction of expenses of transportation of loading and unloading charges only for the reason that Assessee could not prove the genuineness of expenses. It is an undisputed fact that Assessee is engaged in the business of coal trading and in the nature of business in which Assessee is engaged into, the expenditure on loading and unloading of expenses and the transportation is an important constituent of expenditure and without considering it the correct profits cannot be determined. We also find that Hon’ble Gujarat High Court in the case of CIT vs. President Industries (1999 (4) TMI 8 - GUJARAT High Court) has also noted that entire undisclosed sales could not be added as income of Assessee but addition could be made only to the extent of embedded profits embedded in sales and for which net profit was adopted. Thus we are of the view that in the present case when the sales are undisputed, the ends of justice shall be met if the income of the Assessee is estimated after taking into consideration the net profit rate of 1.5%. - Decided in favour of assessee.
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