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TMI Blog2017 (5) TMI 1835X X X X Extracts X X X X X X X X Extracts X X X X ..... curred the cost. So, in the given circumstances, the only way out is to adopt the net profit by the Revenue authorities, but the same has to be adopted judiciously in the facts and circumstances of the case. In the instant case, there is not an iota of evidence on file as to how the net profit is estimated at exorbitant rate of 22%. Assessee cannot be compared broadly with M/s. Bhaskar Traders which has shown gross profit @ 22%. So, keeping in view the net profit shown by the assessee in the earlier year @ 16%, we do not find any evidence on record to reach at the conclusion that in the next year, net profit is increased by 6%. So, in these circumstances, we find it appropriate to estimate the net profit @ 16% on the undisclosed sales of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals), Berhampur, Odisha qua the assessment year 2009-10 on the grounds inter alai that :- "1. For that under the facts and circumstances of the case the learned A.O. is not justified to treat the income of Rs. 2,96,000/- as income from Interest (Other Sources) instead of Income from Business and thereby disallowing the claim of Remuneration to Partners. 2. For that the learned A.D. as-well-as the learned Commissioner should have accepted the contention of the appellant. 3. For that the learned Commissioner is not justified to confirm the view of the learned A.D. to determine the sum of Rs. 1,58,75,339/- as undisclosed sales. 4. For that the learned Commissioner is also not justified to apply 22% rate of profit to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the bottom of the page. The said amount pertained to the sales to various parties during October, November and December. Assessee by relying upon pages 11, 12, & 13 of SSOM-19 sought to reconcile the amount but the AO, being not satisfied, made an addition of an amount of Rs. 1,58,75,339/- as undisclosed sales. 6. Assessee carried the matter before the ld. CIT (A) by filing an appeal who has restricted the addition to Rs. 34,92,575/- by estimating the profit on disclosed sales of Rs. 1,58,75,339/- @ 22%. Feeling aggrieved, both the assessee as well as Revenue has come up before the Tribunal by filing the present cross appeals challenging the impugned order passed by the ld. CIT (A). 7. We have heard the ld. Authorized Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total undisclosed sales of Rs. 1,58,75,339/- in this case could not be recorded as profit of the assessee. The net profit rate had to be adopted and once it was adopted, it could not be said that there was perversity of approach. Whether the rate was low or high would depend on each case. While following the aforesaid decision rendered by Hon'ble Madhya Pradesh High Court in CIT vs. Balchand Ajit Kumar (supra), the ld. CIT (A) estimated the profit @ 22% and worked out addition to the total income of the assessee to the tune of Rs. 34,92,575/-. 11. Following the law laid down by Hon'ble Madhya Pradesh High Court in CIT vs. Balchand Ajit Kumar (supra), we are of the considered view that total sales of Rs. 1,58,75,339/- cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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