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TMI Blog2015 (6) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... l period forming part of the block period falling under assessment year 2002-03 and then estimate undisclosed income in relation to such unaccounted turnover adopting net profit rate of 3.91% for all the assessment years and terminal broken period falling in the block period. In the present case, in the absence of any material to take a contra view, the question of fact as determined by the Tribunal is required to be accepted. Hence, we see no reason to interfere with the orders of the Tribunal with regard to the determination of undisclosed income. X X X X Extracts X X X X X X X X Extracts X X X X ..... ade on estimate basis by complying with the principles set out by the jurisdictional High Court Judgment in Rajnik & Company 251 ITR 561 and the decision of the Tribunal in Dr.S.Surendranath Reddy v. ACIT 72 ITD 205 . The Tribunal recorded as under: "8. In the light of the above discussion, in view of the various infirmities and inconsistencies noted above in the approach adopted by the lower authorities while determining the undisclosed income of the assessee by extrapolation of the material found during the course of search for earlier years forming part of the block assessment, we have to determine the undisclosed income of the assessee on a reasonable basis, in consonance with the principles laid down by the jurisdictional High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting gross profit rate of the relevant years / period. It is settled position of law as laid down among others by the Delhi High Court in the case of CIT V/s Satish Kumar Chandna, New Delhi, vide judgment dated 21.9.2007 in ITA No.142 of 2004, besides the decisions of various Benches of the Tribunal including the Hyderabad Benches in similar matters, it is only the net profit and not the gross profit rate that is relevant to determine the undisclosed income, since even in respect of gross profit in relation to suppressed turnover, certain amounts of indirect costs have to be incurred by the assessee, and it is after exclusion of the same from the gross profit, that one can arrive at the net profit and more importantly undisclosed income in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermination of undisclosed income for the entire block period ultimately shall not be on a figure below the undisclosed income by the assessee, while at the same time, disclosure of higher undisclosed income by the assessee for any individual year(s) have to be ignored." 4. The extracted portion of the order of the Tribunal reveals that the Tribunal had taken into consideration various factors, which are being challenged before us as erroneous or perverse. In case of estimation, there is an element of guess work involved and as long as the same is made following the settled principles, the determination of undisclosed income of the assessee on a reasonable basis is purely a question of fact. In the present case, in the absence of any mater ..... X X X X Extracts X X X X X X X X Extracts X X X X
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