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Commissioner Of Income Tax (C)-Iii vs Sh. Gopal Gupta on 16 May, 2014

Mr. Khaitan for the assessee tried to make a very rational interpretation of the calculation made by the settlement commission, with the view to justify it. He tried to explain the alleged expenses of Rs.272 crores which were termed "bogus" by the revenue. He said the gross profit percentage should be taken as the bench mark. This was done by the Settlement Commission by adding Rs.36 crores. Adding the entire unexplained expenses of Rs.272.15 crores paid by the shell companies would produce an absurd result. If the order of the Settlement Commission arrived at, is not arbitrary or perverse but plausible the court will not interfere with it. (See the Division Bench judgment of the Delhi High Court in Commissioner of Income-Tax Vs. Gopal Gupta reported in (2014) 364 ITR 446 (Delhi).
Delhi High Court Cites 15 - Cited by 10 - B D Ahmed - Full Document

Commissioner Of Sales-Tax, Madhya ... vs M/S. H.M. Esufall, H. M. Abdulali, ... on 18 April, 1973

The second argument was that the ratio of expenses to gross receipts as adjudged by the Settlement Commission is in accordance with the usual ratio for these factors in the trade of coal mine excavation, operation management etc. Therefore, this value ought to be accepted by the Court. The justification for this kind of acceptance is sought to be drawn from various cases on best judgment awards. In fact, it is contended on behalf of the assessee that in the case of organisations doing similar business, the ratio is much higher. The gross profit rate of 41.2% was higher than the previous gross profit rate of 36%, which was even higher than that of Coal India subsidiaries which was in the range of 22% to 38%. Honest guest work is permitted in best judgment assessment (see Commissioner of Sales Tax Vs. H. M. Abdulali reported in (1973) 90 ITR 271 (SC) at pages 275-276, 277, 278.
Supreme Court of India Cites 9 - Cited by 192 - K S Hegde - Full Document
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