TMI Blog2016 (1) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - IT(SS)A Nos: 522 to 524/AHD/2011 - - - Dated:- 4-11-2015 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.10.1997 on 21.10.1999 declaring total income at Rs. Nil. Thereafter assessment was framed and the income for the block period was assessed at ₹ 12,91,715/- including G.P addition of ₹ 12,51,520/- in respect of A.Y. 93-94 to 96-97 instead of net income of Rs. Nil declared by the Assessee. Aggrieved by the order of A.O, Assessee carried the matter before ld CIT(A) where substantial relief was granted to the Assessee. Against the order of ld. CIT(A), Revenue carried the matter before Tribunal. Tribunal vide order dated 13.05.2008 set aside the issue to the file of A.O. Pursuant to the order of ITAT, A.O vide order dated 18.12.2009 passed order u/s. 254 r.w.s. 158BC and 143(3) and determined the total income for various years at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the same have become final and ought to have been followed by the CIT(A) while passing the impugned order. 5. Ld.CIT(A) has accordingly erred in law in reviewing his predecessor's order and confirming the action of ld. AO in making addition in those assessment years wherein the return of income was not filed on account of income being below the taxable limit, which in any case was settled before the final fact finding authority and therefore such action of both the lower authorities was beyond their jurisdiction and accordingly on this short ground only such additions are required to be deleted. 6. Both the lower authorities have erred in law and on facts in passing the orders without properly appreciating the fact and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, Assessee placed on record the tax audit report of M/s. Omprakash Co. for A.Y. 96-97 which was also engaged in the business of coal trading and it had declared GP rate at 6.19% and NP rate at 1.5%. A.O in the second round adopted the GP rate at 6.91% being the GP rate of Omprakash Co. and after deducting the administrative expenses made the impugned addition. Ld. A.R. submitted that in the nature of business of coal trading in which Assessee is engaged into, the Assessee has to incur expenditure on transportation and loading and unloading and without taking into consideration the aforesaid expenses, the income of the Assessee cannot be estimated. He therefore submitted that Assessee should be given deduction of expenditure in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 (supra) 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. Considering the aforesaid facts and after relying on the decision of Hon ble Gujarat High Court cited hereinabove, 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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