2010 (12) TMI 640

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....Sethi, Advocate for the respondent.   AJAY KUMAR MITTAL, J.   1. The appeal was admitted by this Court on May 20, 2008 for determination of the following substantial question of law:- "Whether the Tribunal is justified in arriving at the conclusion towards net profit rate estimation on the basis of fresh and new base never pleaded by the litigants?"   2. The facts necessary....

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.... (A) vide order dated 19.1.1993 deleted the said additions. Against the order of the CIT (A), the department filed an appeal before the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short "the Tribunal") who set aside the order of the CIT(A) and directed the Assessing Officer to complete the assessment afresh as per the directions given in the order of the Tribunal dated 28.4.1999. &....

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....ts had rightly been rejected. The assessee's failure to produce the books of account along with bills and vouchers to justify that the sales made to its sister concern were at the market rate, it was taken to be fair and reasonable to estimate the income by applying net profit rate of 5% of the sales. The relevant observations of the Tribunal are as under:-   "However, the Tribunal while s....

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....7.77% was arbitrary and unreasonable, taking into account the fact that this was the first year of assessee's business and no addition was made in the block assessment. But at the same time, the fact whether sales made to sister concerns were at market rates or not remained unverifiable. We have also noted that even after showing G.P. rate of 5.82%, the assessee made payments of commission amounti....