2014 (11) TMI 812

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....i: 1. Being aggrieved and dissatisfied with the impugned judgement and order dated 18.10.2002 passed by the Income Tax Appellate Tribunal, 'B' Bench (Tribunal) in Income Tax Appeal No.341/Ahd/2002 for the assessment year 1997-98, the revenue has preferred the present tax appeal with the following substantial question of law:           "Whe....

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....nting to Rs. 1,68,48,663/- are bogus and he added this amount in the computation of the assessee company's income. 2.1 Being aggrieved by the same, the assessee preferred appeal before CIT(Appeals) but the said appeal came to be dismissed. The assessee company thereafter preferred appeal before the Tribunal after hearing the parties, partly allowed the appeal by directing the Assessment Officer....

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....has observed that as no specific defect in the various expenses claimed by the assessee in the profit and loss account could be pointed out by the Department, the Commissioner (Appeals) was not justified in arbitrarily applying the rate of net profit of three per cent in making the addition. He contended that in the present case the Tribunal has applied 12.5% which is grossly on the higher side. ....

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....earned advocate for the appellant has fairly conceded that excess 7% is on higher side and that at the most 3% may be applied. In that view of the matter, going by the peculiar facts of the present case we are of the view that ends of justice will be met by taking mean of maximum and minimum of the profit rate which comes to 5%. Therefore, we think it fit to direct the Assessing Officer to apply 5....