1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T INCOME TAX APPEAL NO.161/2010 COMMISSIONER OF INCOME TAX -I, JODHPUR Vs. M/S. RAJASTHAN INDUSTRIES Date of Judgment : 15.12.2010 HON'BLE MR. JUSTICE A.M. SAPRE HON'BLE MR. JUSTICE C.M. TOTLA Mr. M.R. Singhvi, for the appellant. BY THE COURT : (PER HON'BLE SAPRE,J.) This is an appeal filed by the Commissioner of Income Tax under Section 260-A of the Income Tax Act against an order dated 31.05.2010 passed by I.T.A.T., Jodhpur Bench, Jodhpur (for short called Tribunal) in I.T.A. No.276/JU/2009 for the period AY 2006-07. 2. The dispute relates to assessment year 2006 –2007. The assessee (respondent) is engaged in the business of manufacturing and processing of cloth. Their accounts are audited as required under Section 44 AB of the Act. 3. The dispute arose as to what should be the % of the gross profit that should be applied on the turn over of the assessee for the year under consideration. The A.O. invoked the provisions of Section 145(3) ibid and added a sum of Rs.1,00,000/- in lumpsum and accordingly worked out the taxing liability. The assesee filed an appeal before the Commissioner of Appeals and it is in this appeal; the Commissioner of Appeals invoked the provisions of Section 251(2) ibid against the Assessee and enhanced the addition made by AO. It is against this order; the assessee felt aggrieved and filed further appeal before the Tribunal. By 2 impugned order, the Tribunal allowed the assessee’s appeal and set aside the order passed by Commissioner of Appeals. It is against this order, the Commissioner of Income Tax has felt aggrieved and filed this appeal under section 260-A of the Act. 4. This is what the Tribunal while allowing assessee’s appeal held in para 6 of the impugned order: “ On going through the above said table, it is clear that the assessee has quoted below the BSR rates in the tenders from minimum 5.66% to 23.66%. Therefore, on an average the assessee has quoted above 15% below the BSR rates. Taking all these peculiar circumstances, prevailing for the period under consideration, which were not controverted either by the Assessing Officer or by the ld. CIT(A) bringing on record any material whatsoever. Under these facts and circumstances of the case, we are of the considered view that the rates fixed by the ld. CIT(A) is also on higher side. More so, when it is established by the assessee that his gross contract receipts for the period under consideration increased by 300% to that of for the assessment year 2005- 06. Thus, in the absentence of any contra material made out by the departmental authorities, the statistics given by the assessee are to be accepted in view of the peculiar circumstances that were made out by the assessee before the departmental authorities. Accordingly, we are of the considered view that the profit rate to be taxed in the hands of the assessee for the period under consideration is fixed at a reasonable rate of 8% on net contract receipts of Rs. 6,98,05,911 (13,02,01,119, minusBitumen Rs.5,10,97,765andSub-Contracts Rs.92,97,443)subject to depreciation of Rs. 11,55,967/- and Sales Tax paid 3 at Rs. 19,53,016/- during the year under consideration. Accordingly, the issue number 3 is hereby allowed. This finding is given basing on pecullar circumstances detailed supra and hence it will not have any effect of binding precedence.” 5. Mere perusal of para 6 would go to show that Tribunal has gone into the facts and then accepted the factual explanation offered by the assessee as to why and on what basis and for what reason their turn over was increased and why a particular % G.P rate was applied. This in our opinion does not involve any substantial question of law. Since the Tribunal examined the whole issue on facts and came to a conclusion that the reasons assigned by the assessee are plausible, there was no occasion for the Commissioner of Appeals to have invoked the provisions of Section 251(2) and made further additions. This Court in an appeal filed under Section 260-A ibid cannot examine the correctness of factual findings recorded by the Tribunal. It is not permissible because it does not involve any issue of law much less substantial question of law. 6. Though learned counsel for the appellant tried to press in service submissions but in our view the submissions are mostly on facts and hence we are not impressed with such submissions. 7. In view of foregoing discussion, we find no merit in the appeal which does not involve any substantial question of law within the meaning of section 260-A ibid . The appeal thus fails and is hereby dismissed in limini. No costs. [C.M. Totla ], J. [A .M. Sapre],J. /Anil/