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2018 (4) TMI 1518 - AT - Income TaxN.P. determination - CIT-A restricting the net profit rate of 37. 97% on estimation basis - Held that:- CIT(A) relied on the NABARD report, to restrict the net profit at 37. 93%, which according to us is not solely a determinative factor to work out net profit of the assessee company because it is only a report and not a comparable financial statement in assessee’s similar business. AO as well as ld. CIT(A) has failed to bring on record, the outside comparable cases of the similar business, as the assessee is running. AO has not worked out a detailed report on the pasthistory and profitability of the assessee company and if the past profitability of the assessee company is not available, the Assessing Officer should bring on his record the comparable businesses where the similar business or activities were carried on, to adopt the net profit ratio. Therefore, we are of the view that it would be appropriate to remit the said issue back to the file of the Assessing Officer with a direction to work out the assessee’s past profitability history and also the comparable of the similar business entities working in similar products and similar environment. - Appeal allowed for statistical purposes.
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