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TMI Blog2019 (7) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... imating the turnover on the basis of information received from the Excise Department by rejecting books of accounts under section 145 (3) of the Act, 1961 and taxing entire suppressed sale as income, but only the net profit part could have been taxed as income. We perceive that a Division of the High Court in CIT Vs. Balchand Ajit Kumar [ 2003 (4) TMI 76 - MADHYA PRADESH HIGH COURT] has held that the total sales cannot be regarded as the profit of the assessee. - Decided against revenue - I.T.A.No.18/2019, I.T.A.No.36/2019 - - - Dated:- 12-7-2019 - Sanjay Yadav And Vivek Agarwal JJ. For the Appellant : Shri D.P.S. Bhadoriya, learned counsel ORDER I.T.A.No.18/2019: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion were furnished by the assessee. The assessing officer while observing that by not recording day to day shop-wise details of sale in the books of accounts, the assessee was having tremendous scope of suppressing its sale. Consequently, rejected the books of accounts and taking into consideration certain incidental complimentary sale and possible solitary instances of sale below MRP, the addition representing difference of average sale of MSP and MRP and by reducing disclosed sales, arrived at ₹ 2,98,60,025/- as difference of suppressed sale. Assessing officer further disallowed ₹ 18075/- which was imposed as penalty by the Excise Department being not admissible under section 37 of the I.T.Act. The Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;Net Profit Chart' of the assesses's past history on profit rate, as above, it is evident that the Net Profit Rate is reasonably declared at 0.95 and 0.93 in respect of assessment year 2010-11 and 2011-12 respectively as against 1.94% and 1.09% of the previous years after deducting interest and salary to partners. After considering the decision cited and the history of the case, it is factually clear that the profit rate applied by the Ld. CIT (A) at 3% is on the higher side and is unreasonable. 7. The findings arrived at by the Tribunal are finding of facts. And as to proposed substantial question as to whether in view of the facts as regard to defects of the sales unsupported by day to day shop w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of net profit income. In the case of CIT v. President Industries [2002] 258 ITR 654, the High Court of Gujarat in a similar matter came to hold as under (page 655) : Having perused the assessment order made by the Assessing Officer, the order made by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal, we are satisfied that the Tribunal was justified in rejecting the application under Section 256(1). It cannot be a matter of an argument that the amount of sales by itself cannot represent the income of the assessee who has not disclosed the sales. The sales only represented the price received by the seller of the goods for the acquisition of which it has already incurred the cost. It is the reali ..... X X X X Extracts X X X X X X X X Extracts X X X X
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