TMI Blog1985 (11) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... of 15 per cent the resultant addition came to Rs. 1,02,780. The assessee went in appeal to the AAC who reduced the SOP to Rs. 750 as originally assessed and the G. P. to Rs. 37,686 applying a rate of 5.5 per cent as against applied by the ITO. The Department has come up in second appeal before us and the assessee has filed his cross objections challenging the reopening of the proceedings altogether. In the second year similarly original assessment was made under s. 143 (1) at an income of Rs. 26,630. The case was thereafter reopened under s. 143 (2) and net profit rate declared at 4 per cent was enhanced by 15 per cent which resulted in an addition of Rs. 86,279. The AAC again reduced the net profit to 5.5 per cent resulting a relief of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of failure on the part of the assessee to disclose fully and truly all the facts necessary for the assessment. In Indian Eastern New Papers Society vs. CIT. New Delhi (1979) 12 CTR (SC) 190 : (1979) 119 ITR 996 (SC) the opinion of the Internal Audit party of Income Tax on a point of law was held not to be sufficient information for reopening the proceedings. The earlier proposition laid down by the Supreme Court in Kalyanji Mavji vs. CIT 1976 CTR (SC) 85 : (1976) 102 ITR 287 (SC) that if the ITO on reappraising the material considered by him in the original assessment discovered that he had committed an error in consequence of which income had escaped assessment was departed from and it was held that an error discovered on re-conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der s. 143(2) and the assessee had not even objected to the proceedings. Now as regards, the rate of profits before the CIT (A) it was argued in this year that in the asst. yr. 1980-81, the ITO had himself accepted a net profit rate of 2.5 per cent and in another comparable cases the CIT (A) had by this order dt. 20th Sept. 1981 had approved the rate of 3 per cent. Before the CIT (A) photocopy of the appellant order in the case of M/s. Sujlam Construction Co. Ltd. was filed. The CIT (A), therefore, came to the conclusion that the net profit rate at 5.5 per cent quite reasonable. No instance of the kind pointed out before the CIT (A) was brought to our notice. Reliance was placed upon the order of the ITO in relation to the assessee own case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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