2015 (9) TMI 754

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....tiated and the assessment was completed, in which it was indicated that the assessee failed to produce the books of account and the relevant documents and, therefore, the correctness of the trading results could not be verified. The assessing officer applied the net profit rate of 10% to compute the profit of the assessee and also added Rs. 56,65,753/- towards suppressed purchases from undisclosed sources. The assessee, being aggrieved, filed an appeal, which was allowed. The appellate authority deleted the suppressed purchases of Rs. 56,65,753/- as well as reduced the profit rate from 10% to 6%. The appellate authority held as under:- "Coming to the estimation of gross profit and addition on account of unexplained purchases, it appears t....

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....tes that the appellant was living in a rented house and was having no assets. There are no immovable properties in the name of appellant or her husband. Thus the fact that the appellant was not having any worthwhile assets only confirms the view taken by me that the investments in purchases are not to be considered in the hands of the appellant. In my view, it will be best to estimate the net profit of the appellant. Since the net profit only is estimated, in my view it will be fair and reasonable, if a net profit rate of 6% is applied. Generally the net profit is applied on the sales, but in this case, since the only verifiable figures are of purchases, and the transactions done by the appellant are not simple trading transactions, the n....