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2022 (2) TMI 388 - AT - Income TaxReopening of assessment u/s 147 - unexplained deposit in his bank account in Punjab National Bank - HELD THAT:- We are of the view that the reasons recorded was not correct, and the AO has not assumed jurisdiction validly, therefore, the action of the AO is void-ab initio and all subsequent action is liable to be set-aside. Even on merit, we find that Ld. CIT(A) estimated the income @ 51.84% on account of undisclosed sales. The assessee claimed that he has shown book net book profit @ 11.45% and in subsequent year Assessing Officer has made addition @ 10% of net profit in the assessment order passed under section 143(3) of the Act. It is settled law that only profit element embedded in undisclosed sale or purchases is to be added not the substantial part of transaction. In our view when in subsequent assessment year in AY 2011-12, the AO himself made addition only @ 10% of net profit in the assessment order passed under section 143(3); the book profit shown by assessee @ 11.45% for the year under consideration was reasonable and justified. Therefore, the assessee also succeeded on merit. Appeal of assessee allowed.
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