CIT v. President Industries

258 ITR 654High Court2002#148 most cited

What is CIT v. President Industries authority for?

When books of account are rejected and unaccounted sales or receipts are discovered, the income addition is restricted to the net profit element embedded in these undisclosed transactions, not the entire sale proceeds or receipts, especially if corresponding purchases are not proven to be outside the books.

471

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2008 to 2026.

Also referred to as

CIT v. President Industries · 258 ITR 654 · Gujarat High Court · rejection of books of account · unaccounted sales · undisclosed sales · on-money receipts · profit element · net profit embedded · section 145(3) · section 132 · section 153A

Also reported as

124 Taxmann 654158 CTR 372134 TTJ 129

Sections most often in play

Section 143(3)Section 147Section 132Section 148Section 153ASection 115BBESection 142(1)Section 133A

Issues it is cited on

section 256(1)on money receiptsection 256project completion methodsurrender of incomeon-moneysection 69bsection 292crejection of books of accountloose paperssection 145(3)retracted statement

Judgments citing CIT v. President Industries

Aisect Ltd., Bhopal vs. ACIT Range 1(1), Bhopal

ITA 946/IND/2019[2015-16]Status: DisposedITAT Indore28 Jun 2021AY 2015-16

Bench: Hon’Ble Manish Borad & Hon’Ble Madhumita Roy

Section 143(3)

…settled judicial precedents was uncalled for. Further Ld. A.O also failed to take note of the fact that when the sales have been accepted then there has to be corresponding purchases. Hon’ble Gujarat High Court in the case of CIT V/s President Industries 258 ITR 654 (Gujarat) has held that “amount of sales itself cannot represent the income of the assessee who has not disclosed sales. The sales only represented the price received by the seller of the goods for the acquisition of which it has already incurred the cost. It is the realisation of excess over the cost incurred that only forms part of the profit…

Aisect Ltd., Bhopal vs. ACIT Range 1(1), Bhopal

ITA 945/IND/2019[2013-14]Status: DisposedITAT Indore28 Jun 2021AY 2013-14

Bench: Hon’Ble Manish Borad & Hon’Ble Madhumita Roy

Section 143(3)

…settled judicial precedents was uncalled for. Further Ld. A.O also failed to take note of the fact that when the sales have been accepted then there has to be corresponding purchases. Hon’ble Gujarat High Court in the case of CIT V/s President Industries 258 ITR 654 (Gujarat) has held that “amount of sales itself cannot represent the income of the assessee who has not disclosed sales. The sales only represented the price received by the seller of the goods for the acquisition of which it has already incurred the cost. It is the realisation of excess over the cost incurred that only forms part of the profit…

ACIT, Central Circle-3, Jaipur vs. M/S. Lakhi Gems, Jaipur

In the result, ground of appeal taken by the Revenue as well as that of the assessee is hereby dismissed

ITA 1306/JPR/2019[2009-10]Status: DisposedITAT Jaipur22 Jun 2021AY 2009-10
For Appellant: Sh. P. C. Parwal (CA)For Respondent: Sh. B. K. Gupta (CIT) fu/kZkfjrh dh vksj ls@
Section 143(3)Section 145(3)Section 147

…ered as income. At the most, the gross profit on such sales can be considered as income. For this reliance is placed on the following cases:- • Mohan Sadhani Vs. CIT 304 ITR 52 (MP) • CIT Vs. Balchand Ajit Kumar 263 ITR 610 (MP) • CIT Vs. President Industries 258 ITR 654 (Guj) 31. It was further submitted that in course of search, the stock found was valued at Rs. 23,69,75,523/-. After considering the book stock of M/s Bihari Lal Holaram and of the assessee firm at Rs. 18,98,37,741/-, the excess stock was determined at Rs. 4,69,37,782/-. This excess stock was offered in M/s Bihari Lal Holaram. Therefore in case…

M/S Ekta Housing Pvt. Ltd., Mumbai vs. Dy. CIT Central Circle-6(2), Mumbai

The appeal of the revenue is dismissed

ITA 1732/MUM/2019[2013-14]Status: DisposedITAT Mumbai24 May 2021AY 2013-14

Bench: Shri S.Rifaur Rahman () & Shri Ravish Sood ()

…could be taxed is only income and not receipts. We further note that in various judgments relied on above it has been categorically held that on-money receipts are in the nature of sale price and not income per se. In the case of CIT vs. President Industries [258 ITR 654 (Guj)] it has been held that the entire sum of undisclosed sale proceeds cannot be treated as income. Similar view has been taken by the Hon‟ble Bombay High Court in the case of CIT vs. Hariram Bhambhani in ITXA No. 313 of 2013. Further in the case of GuruprernaEnterprises (supra) relying on Abhishek Page 21 Corporation vs. DCIT [63 TTJ (Ahd) 6…

M/S. Shreeji Enterprise, Surat vs. The DCIT, Circle-3, Surat

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 618/AHD/2016[2008-09]Status: DisposedITAT Surat19 Apr 2021AY 2008-09

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकरअपीलसं./Ita No.618/Ahd/2016 ("नधा"रणवष" / Assessment Years: (2008-09) (Virtual Court Hearing) M/S. Shreeji Enterprises, The Dcit, Circle-3, Vs. L-4, Nandanvan Complex, Anand Surat. Mahal Road, Adajan, Surat-395009. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Abjfs2664J (Assessee) (Respondent)

For Appellant: Shri P. M. Jagasheth, CAFor Respondent: Ms Usha Shrote, Sr. DR
Section 144Section 147Section 68

…concealed his income. Now coming to the next question whether turnover/sales is treated as income or net profit embedded in sales is treated as income of the assessee. In this regard we note that Hon’ble Gujarat High Court in the case of President Industries 258 ITR 654 Assessment Years.2008-09 M/s. Shreeji Enterprises held that only net profit embedded in sales should be treated as income. The findings of the Hon’ble court is reproduced below: “2. The facts giving rise to the present case are that during the course of survey conducted on the premises of the assessee on 1-12-1994, from the excise records found,…

Assistant Commissioner of Income Tax, Circle-1, Kota vs. Shri Ganpati Developers, Kota

In the result, both i.e. appeal of the Revenue and C

ITA 1348/JPR/2018[2015-16]Status: DisposedITAT Jaipur30 Mar 2021AY 2015-16

Bench: Shri Sandeep Gosain, Jm & Shri Vikram Singh Yadav, Am Vk;Dj Vihy La-@Ita No. 1348/Jp/2018 Fu/Kzkj.K O"Kz@Assessment Year :2015-16 A.C.I.T., Cuke M/S Shri Ganpati Developers, Vs. Circle-1, C-150, Road No. 5, I.P.I.A., Kota. Kota. Lfkk;H Ys[Kk La-@Thvkbzvkj La-@Pan/Gir No.: Abzfs 8967 Q Vihykfkhz@Appellant Izr;Fkhz@Respondent

For Appellant: Shri Rajiv Sogani (CA) &For Respondent: Smt. Rooni Paul (Addl.CIT-DR) fu/kZkfjrh dh vksj ls@
Section 143(3)

…NP 6n sale of Rs.76226175/- is Rs.4141130/- (PB 83) which gives NP rate of 5.43%.1f at all any additional sale is sustained additional income should be worked out thereon @5.43%. Reliance in this regard is placed on:- (i) CIT Vs. President Industries (2000) 158 CTR 372 (Guj) (ii) CIT vs. Gotan Lime Khanij Udhyog (2001) 169 CTR 318 (Raj) (iii) CIT vs. Bakhand Ajit Kumar (2004) 186 CTR 419 (MP) (iv) Man Mohan Sadani vs. CIT (2008) 304 ITR 052 (MP) (v) CIT vs. Inani Marbles (P) Ltd. (2009) 316 ITR 125 (Raj) (vi) Ritesh Kumar Somani vs. ITO— ITA No.618/JP/2011 dated 30.12.2011 (Jaipur ITAT) (vii) Babulal Somani vs…

M/S. Samay Tiles Ltd., Himatnagar vs. The DCIT, S.K.Circle, Himatnagar

In the result, the appeals of the Revenue are partly allowed

ITA 631/AHD/2018[2008-09]Status: DisposedITAT Ahmedabad17 Mar 2021AY 2008-09

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Sanjay R. Shah, A.RFor Respondent: Shri R. R. Makwana, Sr.D.R
Section 143(3)Section 154

…ed cash received by applying the Gross Profit of 40%. CIT(A) however directed the addition to be computed by applying net profit rate of 19.51% of A.Y. 05-06 and 15.51% for A.Y. 06-07 for which reliance was placed on the decision in the case of President Ind. 258 ITR 654 (Guj) and Tribunal decision in the case of Vrundvan Ceramics Pvt. Ltd. vs. DCIT, Gokul Ceramics Pvt. Ltd. vs. DCIT. We find that the facts in the case of President Ind. (supra) were different than that in the case of Assessee as in that case, based on the survey and examination of excise records, unrecorded sales were found. In that case there wa…

Samay Tiles Ltd., Himatnagar vs. The DCIT, S.K.Circle, Himatnagar

In the result, the appeals of the Revenue are partly allowed

ITA 630/AHD/2018[2007-08]Status: DisposedITAT Ahmedabad17 Mar 2021AY 2007-08

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Sanjay R. Shah, A.RFor Respondent: Shri R. R. Makwana, Sr.D.R
Section 143(3)Section 154

…ed cash received by applying the Gross Profit of 40%. CIT(A) however directed the addition to be computed by applying net profit rate of 19.51% of A.Y. 05-06 and 15.51% for A.Y. 06-07 for which reliance was placed on the decision in the case of President Ind. 258 ITR 654 (Guj) and Tribunal decision in the case of Vrundvan Ceramics Pvt. Ltd. vs. DCIT, Gokul Ceramics Pvt. Ltd. vs. DCIT. We find that the facts in the case of President Ind. (supra) were different than that in the case of Assessee as in that case, based on the survey and examination of excise records, unrecorded sales were found. In that case there wa…

M/S. Alokik Steels Pvt. Ltd Village Post-Patan, Tehsil-Kishangarh, District-Ajmer, Kishangarh vs. Principal Commissioner of Income Tax-II, Jaipur

In the result, appeal of the assessee is partly allowed in light of aforesaid directions

ITA 861/JPR/2019[2015-16]Status: DisposedITAT Jaipur03 Mar 2021AY 2015-16
For Appellant: Sh. Siddharth Ranka &For Respondent: Sh. B. K. Gupta (CIT)
Section 115BSection 263Section 3Section 69A

…entire receipt believing the it was only the income embedded in such receipt which can be subjected to tax. 10. As pointed out by the counsel for the respondent, this Court in the case of Commissioner of Income Tax v. President Industries, reported in (2002) 258 ITR 654 had taken a similar view. In the said case, during the course of survey conducted on the premises of the assessee, from the excise records found, an inference was drawn by the Assessing Officer that sales accounting to Rs. 29 lakhs and odd had not been disclosed in the books of account. The Assessing Officer made addition of the entire sum of the…

DCIT Cent. Cir. -5(3) (Erstwhile DCIT Cent. Cir. -36), Mumbai vs. Sumer Builders, Mumbai

In the result, appeal of the assessee is partly allowed as indicated above and appeal of the Revenue is dismissed

ITA 5130/MUM/2016[2011-12]Status: DisposedITAT Mumbai08 Jan 2021AY 2011-12

Bench: Shri C.N. Prasad, Hon'Ble & Shri M. Balaganesh, Hon'Blem/S. Sumer Builders V. Dy. Commissioner Of Income-Tax Central Circle – 5(3) 201, Commerce House {Erstwhile Dcit, Central Circle – 36} 140, Nm Road, Fort Room No. 1906, 19Th Floor Mumbai – 400 023 Air India Building, Nariman Point Mumbai – 400 021 Pan: Aaafs2829R

For Appellant: Shri Nishit GandhiFor Respondent: Shri A. Mohan
Section 36(1)(iii)

…receipt. For this he relied on the decisions of the Hon'ble Bombay High Court in the case of CIT v. Hariram Bhambhani in ITXA 313 of 2013 and CIT v. Prime Developers in ITXA 2452 of 2013, Hon'ble Gujarat High Court in the case of CIT v. President Industries [258 ITR 654], DCIT v. Panna Corporation in Tax Appeal Nos. 323 and 325 of 2000 and also in the case 46 ITA NO.4915 & 5130/MUM/2016 (A.Y: 2011-12) M/s. Sumer Builders of Dhanvarsha Builders and Developers Pvt. Ltd. v. DCIT [102 ITD 375 (Pune)] and DCIT v. Prime Developers in ITA Nos. 175 to 178 and 321 to 324/Mum/2010. Ld. Counsel for the assessee therefore…

Sumer Builders, Mumbai vs. DCIT Cen Cir 5(3), Mumbai

In the result, appeal of the assessee is partly allowed as indicated above and appeal of the Revenue is dismissed

ITA 4915/MUM/2016[2011-12]Status: DisposedITAT Mumbai08 Jan 2021AY 2011-12

Bench: Shri C.N. Prasad, Hon'Ble & Shri M. Balaganesh, Hon'Blem/S. Sumer Builders V. Dy. Commissioner Of Income-Tax Central Circle – 5(3) 201, Commerce House {Erstwhile Dcit, Central Circle – 36} 140, Nm Road, Fort Room No. 1906, 19Th Floor Mumbai – 400 023 Air India Building, Nariman Point Mumbai – 400 021 Pan: Aaafs2829R

For Appellant: Shri Nishit GandhiFor Respondent: Shri A. Mohan
Section 36(1)(iii)

…receipt. For this he relied on the decisions of the Hon'ble Bombay High Court in the case of CIT v. Hariram Bhambhani in ITXA 313 of 2013 and CIT v. Prime Developers in ITXA 2452 of 2013, Hon'ble Gujarat High Court in the case of CIT v. President Industries [258 ITR 654], DCIT v. Panna Corporation in Tax Appeal Nos. 323 and 325 of 2000 and also in the case 46 ITA NO.4915 & 5130/MUM/2016 (A.Y: 2011-12) M/s. Sumer Builders of Dhanvarsha Builders and Developers Pvt. Ltd. v. DCIT [102 ITD 375 (Pune)] and DCIT v. Prime Developers in ITA Nos. 175 to 178 and 321 to 324/Mum/2010. Ld. Counsel for the assessee therefore…

The Dy. Commissioner of Income Tax, Circle-2(3), Surat vs. M/S. Shhlok Enterprise, Surat

In the result the grounds of appeal raised by the revenue are dismissed

ITA 2018/AHD/2016[2012-13]Status: DisposedITAT Surat06 Jan 2021AY 2012-13

Bench: Shri Pawan Singh & Dr. Arjun Lal Saini(Virtual Court Hearing) Deputy Commissioner Of Income Vs. M/S. Shhlok Enterprise, Tax, Circle-2(3), Surat Block No.292, Plot No.135/B, Shhlok Arcede, Bamroli Road, Surat. Pan : Abufs8091E Appellant Respondednt

Section 131Section 133ASection 143(3)Section 68

…ecorded that it was argued before him that it is settled law that when unaccounted sale is detected only the profit component embedded therein should be brought to tax and relied on the decision of jurisdictional High Court in CIT versus President Industries [258 ITR 654(Gujarat)]. The learned Commissioner (Appeals) further noted that it was argued before him that out of the total unaccounted on money of ₹ 7.56 Crore, they have offered Rs. 2.00 Crore as undisclosed income which is 26.83%, which is much more than the regular profit rate of 8% offered by assessee in the return of income. Thus, the additional disclo…

Param Dairy Ltd., New Delhi vs. ACIT, Central Circle- 14, New Delhi

In the result, for both the years, the appeal of the assessee is partly allowed

ITA 3994/DEL/2019[2014-15]Status: DisposedITAT Delhi03 Dec 2020AY 2014-15

Bench: Shri Amit Shukla & Shri O.P. Kant

For Appellant: Shri Ajay Vohra, Sr. Adv., Shri RohitFor Respondent: Smt. Sushma Singh, CIT-DR
Section 132Section 143(3)Section 153ASection 153DSection 234BSection 40A(3)Section 69C

…to be bogus, then, addition could have, at worst, been made only to the extent of profit on the sales made against the said purchases – the entire purchases cannot be disallowed (GP ratio is around 3% in the present case) [refer CIT vs. President Industries: 258 ITR 654 (Guj.), CIT v. Gurubachansingh J. Juneja: 302 ITR 63 (Guj.), PCIT vs. Ashokkumar C. Dharewa, HUF: TA No. 351 of 2017 (Guj.)]. 27. Lastly, it was submitted that similar purchases on account of milk tanki purchases have been accepted by the assessing officer in assessment years 2015-16 and AY 2016- 17 in the assessment completed under section 143(…

Param Dairy Ltd., New Delhi vs. ACIT, Central Circle- 14, New Delhi

In the result, for both the years, the appeal of the assessee is partly allowed

ITA 3993/DEL/2019[2013-14]Status: DisposedITAT Delhi03 Dec 2020AY 2013-14

Bench: Shri Amit Shukla & Shri O.P. Kant

For Appellant: Shri Ajay Vohra, Sr. Adv., Shri RohitFor Respondent: Smt. Sushma Singh, CIT-DR
Section 132Section 143(3)Section 153ASection 153DSection 234BSection 40A(3)Section 69C

…to be bogus, then, addition could have, at worst, been made only to the extent of profit on the sales made against the said purchases – the entire purchases cannot be disallowed (GP ratio is around 3% in the present case) [refer CIT vs. President Industries: 258 ITR 654 (Guj.), CIT v. Gurubachansingh J. Juneja: 302 ITR 63 (Guj.), PCIT vs. Ashokkumar C. Dharewa, HUF: TA No. 351 of 2017 (Guj.)]. 27. Lastly, it was submitted that similar purchases on account of milk tanki purchases have been accepted by the assessing officer in assessment years 2015-16 and AY 2016- 17 in the assessment completed under section 143(…

Smt. Sarita Chawla, Bhopal vs. The ACIT 1(2), Bhopal

In the result appeal of the assessee for Assessment Years

ITA 442/IND/2015[2006-07]Status: DisposedITAT Indore26 Nov 2020AY 2006-07

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Boradit(Ss)A Nos. 158 To 163/Ind/2015 Assessment Years 2000-01 To 2005-06 & Assessment Year-2006-07

Section 234ASection 234BSection 234CSection 271(1)(c)

…down ratio that “in tax proceedings addition has to be based on evidences. An addition cannot be made on guesswork, presumptions, conjectures and surmises”. 19. We also find that Hon'ble Gujarat High Court in the case of CIT v. President Industries [2002J 258 ITR 654 (Guj.) held as under:- In this case, during the course of survey conducted in the premises of the assessee, excise records were found which disclosed godown sales not disclosed in the books of account of the assessee. The Assessing Officer made addition of undisclosed income of the entire sale proceeds thereof. The Commissioner (Appeals) affirme…

Late Smt. Sudesh Chawla L/H Shri Prem Chawla, Bhopal vs. The ACIT 1(2), Bhopal

In the result appeal of the assessee for Assessment Years

ITA 441/IND/2015[2006-07]Status: DisposedITAT Indore26 Nov 2020AY 2006-07

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Boradit(Ss)A Nos. 158 To 163/Ind/2015 Assessment Years 2000-01 To 2005-06 & Assessment Year-2006-07

Section 234ASection 234BSection 234CSection 271(1)(c)

…down ratio that “in tax proceedings addition has to be based on evidences. An addition cannot be made on guesswork, presumptions, conjectures and surmises”. 19. We also find that Hon'ble Gujarat High Court in the case of CIT v. President Industries [2002J 258 ITR 654 (Guj.) held as under:- In this case, during the course of survey conducted in the premises of the assessee, excise records were found which disclosed godown sales not disclosed in the books of account of the assessee. The Assessing Officer made addition of undisclosed income of the entire sale proceeds thereof. The Commissioner (Appeals) affirme…

The DCIT, 1(1), Bhopal vs. Smt. Sudesh Chawla, Bhopal

In the result appeal of the assessee for Assessment Years

ITA 405/IND/2015[2006-07]Status: DisposedITAT Indore26 Nov 2020AY 2006-07

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Boradit(Ss)A Nos. 158 To 163/Ind/2015 Assessment Years 2000-01 To 2005-06 & Assessment Year-2006-07

Section 234ASection 234BSection 234CSection 271(1)(c)

…down ratio that “in tax proceedings addition has to be based on evidences. An addition cannot be made on guesswork, presumptions, conjectures and surmises”. 19. We also find that Hon'ble Gujarat High Court in the case of CIT v. President Industries [2002J 258 ITR 654 (Guj.) held as under:- In this case, during the course of survey conducted in the premises of the assessee, excise records were found which disclosed godown sales not disclosed in the books of account of the assessee. The Assessing Officer made addition of undisclosed income of the entire sale proceeds thereof. The Commissioner (Appeals) affirme…

The ITO, Sendhwa vs. Shri Dwarka Prasad Tayal, Sendhwa

In the result appeal of the assessee ITA No

ITA 334/IND/2018[11-12]Status: DisposedITAT Indore13 Oct 2020

Bench: Hon’Ble Kul Bharat & Hon’Ble Manish Boradassessment Year 2011-12

Section 142(1)(ii)Section 143(1)Section 143(2)Section 143(3)Section 80C

…आयकर अपील"य अ"धकरण, इंदौर "यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON’BLE KUL BHARAT, JUDICIAL MEMBER AND HON’BLE MANISH BORAD, ACCOUNTANT MEMBER Assessment Year 2011-12 Shri Dwarka Prasad Tayal, 4, Jawahar Ganj, Sendhwa (M.P) PAN : AAOPT4070B : Appellant V/s Income Tax Officer Sendhwa (M.P) : Respondent Assessment Year 2011-12 Income Tax Officer Sendhwa (M.P) : Revenue V/s Shri Dwarka Prasad Tayal, 4, Jawahar Ganj, Sendhwa (M.P) PAN : AAOPT4070B : Respondent Revenue by Smt. Ashima Gupta Assessee by Shri S.N. Agrawal, CA Date of Hearing 09.09.2020 Date of Pronounceme…

Shri Dwarka Prasad Tayal, Sendhwa vs. The ITO, Khargon

In the result appeal of the assessee ITA No

ITA 284/IND/2018[2011-12]Status: DisposedITAT Indore13 Oct 2020AY 2011-12

Bench: Hon’Ble Kul Bharat & Hon’Ble Manish Boradassessment Year 2011-12

Section 142(1)(ii)Section 143(1)Section 143(2)Section 143(3)Section 80C

…आयकर अपील"य अ"धकरण, इंदौर "यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON’BLE KUL BHARAT, JUDICIAL MEMBER AND HON’BLE MANISH BORAD, ACCOUNTANT MEMBER Assessment Year 2011-12 Shri Dwarka Prasad Tayal, 4, Jawahar Ganj, Sendhwa (M.P) PAN : AAOPT4070B : Appellant V/s Income Tax Officer Sendhwa (M.P) : Respondent Assessment Year 2011-12 Income Tax Officer Sendhwa (M.P) : Revenue V/s Shri Dwarka Prasad Tayal, 4, Jawahar Ganj, Sendhwa (M.P) PAN : AAOPT4070B : Respondent Revenue by Smt. Ashima Gupta Assessee by Shri S.N. Agrawal, CA Date of Hearing 09.09.2020 Date of Pronounceme…

Deputy Commissioner of Income Tax, Pune vs. M/S. Ramelex Private Ltd, Pune

In the result, the appeal of Revenue is dismissed

ITA 1157/PUN/2017[2009-10]Status: DisposedITAT Pune24 Sept 2020AY 2009-10

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Ravi

For Appellant: Shri Kishor PhadkeFor Respondent: Shri Alok Malviya

…uced here-in-below : “6.3 DECISION :- The question whether entire purchases should be disallowed or addition, should be restricted to the profits embodied on sale proceeds was' answered by Hon'ble Gujarat High Court in the case of CIT vs President Industries (258 ITR 654) and Hon'ble Madhya Pradesh High Court in the case of CIT vs Balchand Ajit Kumar (263 ITR 610) Considering the above decisions, it is clear that only the profits embodied on sale proceeds should be taxed instead of addition on account of entire purchases. Looking to the circumstantial evidence in the present case, it is evident that impugned purc…