2017 (1) TMI 179

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....91 excess stock was found than the previous year. The Tribunal while reversing the view taken by the CIT(Appeals) has estimated the gross profit Rs. 7,26,625/-. 3. This Court while admitting the appeal on 11.07.2003 framed following substantial questions of law: "(i) Whether Tribunal was justified in estimating the G.P. rate at 10.38% in the year 1991-92. (ii) Whether the estimation of trading additions at Rs. 4.00 lakh in the present case is not arbitrary and without any basis?" 4. Counsel for the appellant, Mr. Prakul Khurana invited our attention towards the observation made by the CIT(Appeal) in para 5, which reads as under: "I have considered the findings of the AO and the arguments of the ld. A/R. It is clear that the turnover....

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....00/- was admitted. This indicates that the appellant was carrying on apart of turnover not recorded in the books in the ratio of opening stock and closing stock, turnover can be estimated at Rs. 5 lacs which involved two elements one is about the investment reflected in the value of the stock which has already been surrendered by the appellant. Second element is of the gross profit on this turnover @ 6% this give extra profit of Rs. 30,000/-, therefore the addition to the extent of Rs. 30,000/- is sustained resulting in relief of Rs. 6,71,025/-." 5. After considering the evidence on record the CIT(Appeals) has allowed the appeal partly and upheld the additions to the Income of the assessee to the extent of 7,26,625/-. 6. The Tribunal allo....