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TMI Blog2011 (2) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... Y KUMAR MITTAL, J. 1. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 29.10.2002 passed by the Income Tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 93/CHANDI/97, for the assessment year 1993-94, claiming following substantial question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Income Tax (Appeals) [in short "the CIT(A)"] who upheld the order of the Assessing Officer applying 10% of net profit rate. Against the order of the CIT(A), assessee filed further appeal to the Tribunal. The Tribunal vide order dated 29.10.2002 treated the profit disclosed by the assessee to be reasonable and acceptable. Hence, the present appeal by the revenue. 3. We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of a flat rate of 10% by the Assessing Officer, Shri Atul Jain, CA, contended." 6. The CIT(A) on appeal by the assessee had affirmed the said net profit rate while observing as under:- "2.4 The contention of the assessee appears to be reasonable in as much as the unexplained cash credits are nothing but the manifestation of unexplained income earned by the assessee during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,417/- in relation to contractual receipts of Rs.1,16,65,879/- and the gross profit thus works out to be 1.86%. He further submitted that after taking into consideration the depreciation, interest and salary paid to the partners which has been debited to the profit and loss account, the net profit rate would work out to 3.4% only. The Tribunal, however, has observed that the net profit rate discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer and the CIT (A) while adopting the net profit rate of 10% had kept in mind that this included the cash credits which had not been disclosed in the books of accounts and this was as per submission of counsel for the assessee. However, the Tribunal failed to advert to the aforesaid aspect and, therefore, the order stands vitiated. 11. In view of the above, the substantial question of law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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