2007 (10) TMI 246

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....n the facts and circumstances of the case, the Tribunal was correct in law in holding that the entire sales were liable to be assessed as income even when the purchases were recorded in the books of account ? (ii) Whether the learned Tribunal is legally correct in not deleting the addition of Rs. 1,00,000 on the facts of the case even after recording a finding that cash was brought from home but treating it covered by the addition of undisclosed sales ?" 3. As far as the first substantial question of law is concerned, it is submitted by learned senior counsel for the appellant that the Income-tax Appellate Tribunal in the impugned order has misinterpreted, misread and mis-applied the judgment of this court reported in the matter of CI....

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....e 612) : "On appreciating the rival submissions raised at the Bar, we have carefully perused the order passed by the Commissioner of Income-tax (Appeals) and also that of the Tribunal. It is not disputed that the undisclosed income was Rs. 2,57,000. The sole question that arises for consideration is whether the entire income has to be treated as profit or there should be adoption of a method of net profit income.  In the case of CIT v. President Industries [2002] 258 ITR 654, the High Court of Gujarat in a similar matter came to hold as under (page 655) : 'Having perused the assessment order made by the Assessing Officer, the order made by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal, we are sati....

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....e of five per cent. has been applied. We do not think it appropriate that the same requires to be enhanced. We are also inclined to think that it is high. In any case, it cannot be said that there has been perversity of approach." 5. From a perusal of the aforesaid dicta of this court, it is apparent that this court while deciding the matter has held that the total sales cannot be regarded as profit of the assessee and the net profit rate which was adopted in that case has to be adopted and if it is so adopted it cannot be said that the approach of the assessing authority is perverse. 6. Apparently, this court in the said judgment has not held that the entire sale proceeds have to be or should be regarded as profit or treated as undis....