2020 (1) TMI 699

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....as a substantial questions of law :- "A. Whether on the facts and circumstances of the case and in law, the Hon'ble Income Tax Appellate Tribunal (ITAT) has erred in restoring the matter to the file of the Assessing Officer (AO) to examine the correct net profit ratio of the assessee as assessed in the past and in the subsequent years, ignoring the fact that in the event of bogus purchases being found, the past history of the assessee has no relevance ? B. Whether on the facts and circumstances of the case and in law, the Hon'ble Income Tax Appellate Tribunal (ITAT) has erred in restoring the matter to the file of the Assessing Officer (AO), in view of the decision of the Supreme Court in the case of N.K. Proteins Ltd., wh....

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....ssessee before the CIT(A). However, the CIT(A) has rejected all those submissions and evidences and proceeded to call for the stock register, delivery challans of goods, work orders, etc. After calling for the records, he observed that firstly, work orders are not fully verifiable ; secondly, stock register and delivery challans were either not produced or assessee could not correlate the purchases with the sales ; lastly, the material purchased are not backed by delivery challans on the sites. On these reasons, he affirmed rejection of books of accounts. However, he reiterated the Assessing Officer's estimation of 20%, again without bringing any material on record to support why such a high net profit rate should be applied. If it has been....

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.... 9.50% 143(1) 2009-10 8,26,10,547 76,81,499 9.30% 143(3) 2010-11 10,16,97,391 1,16,70,275 11.48% Under dispute 2011-12 12, 10,16,765 1,16,70,275 11.48% 143(1) 2012-13 15,04,42,377 1,44,28,503 9.50% 143(3) Hence, the assessee's net profit ratio has been ranging approximately at 11.5% then Department has to be given a proper justification as to why net profit rate of 20% should be applied." The Tribunal found that the Assessing Officer, while estimating the net profit at 20% had proceeded on the basis of stock register, delivery challans of goods, work orders, and there was no application of mind for deriving at the figure of 20%. The Tribunal, therefore, found it fi....