[aaykarbhavan] Opinion required on application of GP rate on unaccounted sales

Dear colleagues,

The Assessing Officer is proposing to add percentage of excise duty applicable on the product manufactured to the gross profit percentage margin as per the books of accounts while computing unaccounted income on the alleged unaccounted turnover worked out from the books seized during the search proceedings. In other words if the gross profit margin in the regularly maintained books of accounts is 10% and the excise duty expense as percentage of turnover is say 15% then the Assessing Officer is proposing to estimate unaccounted income at 25% (10+15) of alleged unaccounted turnover.

Have anyone of you come across any judgment or instances for or against the aforesaid proposition of the Assessing officer adopting gross profit margin plus excise duty or that addition of only gross profit margin should only be made?

Please provide judgments if any.

 

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