CIT Vs. FRIENDS BRIQUETTES INDUSTRIES

JUDGEMENT

(1.) THE Income Tax Appellate Tribunal, Delhi, has referred the following question of law under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act) for opinion to this court : 'Whether, on the facts and in the circumstances of the case, the Tribunal was correct in directing the assessing officer to ascertain the net profit rate disclosed by the assessee for the assessment year 1987 -88 and apply the said net profit on Rs. 22 lakhs and make the addition ?'

(2.) THE present reference relates to the assessment year 1987 -88.

(3.) THE respondent, feeling aggrieved, preferred an appeal before the Commissioner (Appeals). While partly allowing the appeal, the Commissioner (Appeals) directed the assessing officer to adopt the figure of Rs. 27 lakhs being estimated by the Sales -tax Authorities for the purpose of income -tax assessment also. He further directed the assessing officer to adopt the gross profit rate of 10 per cent. The respondent as also the revenue preferred separate appeals before the Tribunal. The Tribunal has allowed the appeal filed by the respondent whereas it has dismissed the appeal filed by the revenue. The Tribunal has reduced the sales turnover to Rs. 22 lakhs as per decision of the Sales -tax Tribunal. It had further remanded the matter to the assessing officer to find out the GP rate for the assessment year 1987 -88 and ascertain the net profit rate disclosed by the respondent for the assessment year in question and apply the same to Rs. 22 lakhs and make corresponding addition.