TMI Blog2004 (9) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on undeclared sale of Rs. 19,10,000 - amount of Rs. 5 lakhs surrendered under the Scheme was not only in respect of profits earned on the sales of Rs. 19,10,000. In the declaration filed under the Scheme, it had been clearly stated that the declared amount covered the gross margin after including fixed expenses. It is, therefore, clear that the declared amount was not entirely on account of income from undisclosed sales although it covered the said income also. Thus, it could not be a guide for determining the rate applicable to the sales as declared in the books of account. – Hence, Tribunal was justified in upholding the application of gross profit rate of 22 %. The findings recorded by the Tribunal are pure findings of facts. What sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross profit rate applied and accepted by the Department in the earlier years, held that the Commissioner of Income-tax (Appeals) was justified in reducing the addition by applying the gross profit rate of 22 per cent, as per the past history of the case. Relevant findings are contained in para. 9 of the order, which reads as under: "9. The next question that arises is about estimation of income of the assessee. Even if book results are rejected, the Assessing Officer is duty bound to make a fair and reasonable estimate of income based on evidence and material on record. For this purpose, the past history of the case is the best guide for determining the income of the assessee. We have referred to the past history of the case and found th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of Rs. 5 lakhs declared on the undisclosed sales of Rs. 19,10,000, we find that the same is also based on estimate. The Assessing Officer has not made any addition by treating the deposits as unexplained under section 68. In other words, the Assessing Officer has accepted the fact that these were the sale proceeds of undisclosed sales. Even though there was no evidence, the Assessing Officer had allowed deduction in respect of expenses to the extent of 75 per cent. But the same relates to undisclosed sales. The same criteria cannot be applied to the declared sales without pointing out instances of unverifiable expenses or not supported by bills and vouchers. Therefore, the criteria should have been applied to the declared sales. Having ..... X X X X Extracts X X X X X X X X Extracts X X X X
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