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2023 (6) TMI 121 - AT - Income TaxEstimation of profit from unaccounted sales - Profit estimation on total turnover - CIT(A) deleting the addition on account of estimation of profit from unaccounted sales made by the assessee from the clandestine removal of the goods - As stated by the D.R. in the Central Excise proceedings on the clandestine removal of the goods, the assessee settled the issue by availing Sabka Vishwas Scheme 2019 and paid the taxes on 12-11-2019 - HELD THAT - As submitted by assessee, Tribunal in the case of Ganga Glazed Tiles Pvt. Ltd. 2018 (8) TMI 1847 - ITAT RAJKOT deleted addition following the judgment in the case of Vrundavan Ceramics (P.) Ltd. 2019 (7) TMI 547 - GUJARAT HIGH COURT Revenue s further appeal before the Hon ble High Court were dismissed and SLP filed before Hon ble Supreme Court 2020 (1) TMI 1502 - SUPREME COURT which were happened after the passing of the order by the Ld. CIT(A). Thus we are of the considered opinion, accepting the submissions made under Rule 27 of ITAT Rules and entertaining the judgments placed by the assessee, we deem it fit to set aside the matter back to the file of the Ld. A.O. to consider the above judgments placed by the assessee and determine the income in accordance with law. Appeal filed by the Revenue is hereby allowed for statistical purposes.
Issues:
The appeal by the Revenue against the Appellate order dated 15.05.2017 passed by the Commissioner of Income Tax (Appeals)-3, Rajkot relating to the Assessment Year (A.Y) 2013-14. Issue 1: Estimation of Profit on Unaccounted Sales - The Assessing Officer proposed a Gross Profit (GP) rate of 54.73% on unaccounted sales following a show cause notice issued by the Central Excise Department. - The assessee argued that the proposed GP rate was unrealistic and requested to adopt a Net Profit in the range of 0.75% to 1%, which was reasonable for the industry. - The Assessing Officer, however, computed the Net Profit at 54.73% and added it as unaccounted sales, demanding tax on the amount. - The Ld. CIT(A) estimated the profit at 1% of the total turnover, partly allowing the appeal by the assessee. - The Revenue's appeal was based on the deletion of the addition made on account of the estimation of profit from unaccounted sales. Issue 2: Judicial Precedents and Co-ordinate Bench Decisions - The Ld. Counsel for the assessee cited a judgment by the Hon'ble Gujarat High Court in a similar case, emphasizing that the Assessing Officer lacked independent material for making additions. - Referring to a Co-ordinate Bench decision in another case, it was highlighted that the addition made by the Assessing Officer was deleted, and subsequent appeals by the Revenue were dismissed by higher courts. - The Ld. Counsel requested to consider these judicial precedents and delete the addition determined by the Ld. CIT(A). Judgment: - The Tribunal considered the submissions and case laws presented by both parties. - It noted that the assessee had settled the issue with the Central Excise Department by availing the Sabka Vishwas Scheme 2019 and paying the taxes. - Referring to the Co-ordinate Bench decision and the judgments by higher courts, the Tribunal concluded that the matter should be sent back to the Assessing Officer for reconsideration in light of the judicial precedents. - Accordingly, the appeal filed by the Revenue was allowed for statistical purposes.
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