lllf'S ^ £;Ag¥?^^^^^^^^^^^^^^^^.^.:f^gs^^^^^@^^^sa^^^^^ji^g ;'siy^:::'K^ HIGH.COlME.OIi'eHHATnStMgaiiBJIASPUR Tax^as& N6. -A af 2006.: :;%:^ ';^^: Appellant ^: ' ;^ssiSfaiit GornTnissioner of I •RaipUr.,:'^-;.''' .•'1'' :1' :;;'. ;.1-:;'. 1 •' .\''., ': ~ ^Versus ..'"•••••,: ' i ~ :1 !. -.- • •:'•:'.—••.••''. ^' • • RespolMent , , . 'Shri^'Kewat Kisha.ft.;: Dhuppar c/o' M/s 'HBT Bhagwandas WanakcHand, .Maflaii, Suildm^ :G.E.'Koad..'l':;::'l; '•-.•T " • . •••.'^ ,:.': :;. 1 ft & DEKSEeTION26Q^QE:'mEINte©}^'KXACT<ra •? - •DB:HonT3leShriI.M.Quddusi^^ ..--•, I. : SE H6n'bleShri.N.K,,Agarwal,JJ ' .^ .:••/• ^':^\:^. :i. Rajegy, ShEtvastava,Sfariding Counsel ior tlie^appellant. ^elabh Dubey, AdvgGafef&rfheresppndey vQ'KJiS&iOra^ ', -k. ,...-••:- :', ,••"-•'- :.i . , .^assed/(m^Uis4®ffi'ci^;of'August^^ -. ' ..-:..,,., ': ,P^''I.::M.,Quddust,^. ^..,: ,; -'.^, ,-. : • ' .;....;'^ '.. Th®instant appealiarrses .fi-d^^^^fe^ passed by .the ^Ncome T^ Appellate Tritounal, Nagpur' Beneh, Nagpur,^ in Appeal I.T.A. No. 328/Nag/20Q5:^^^ fear'3,002-2003. :: ', .:.':•:. ^ ::.•: •'• 1 •• .: :-.':l:N....-;:r'' •-: On 25.8.2006, this'appealwasa^ hearing OU(>®IK •foUowing substantial^qySs^ion&oflaw: ,' ''-: ,'\. '^.•••'^^^^^^^^ .''1.1 Wfaether on facta and in the'eircymstarices^^ the,Tribuitar'waajiustifie^? Gommissibner^ of^'tncoitie •Tsa. ; (Appeals) . deleting' jfhe- ; additiori.of;Rs.;24,45^84/-:madely^^ .of\low^gross"proS.f.'1';:..; • :...:' •:/• :: "•'' :;.:;:-- ^. ^ . l:"? '.••.:':'1':;'L.^'^ 1.2 ..WhetUer^n, tKe.,f&ts,andi in' tUe'^rcymst^ tte^eofaclusiQttreactea.by.the^^^ irrelevaaat e8n^ideralaQiis:^ inadefroni^^^^ 1.3 Whether Qto tHe factS and i .^ the: Tribunal'^'has' teased " its^ffl conjectures;orsurnuses.'',,:;r.:.^ • .,' : • '< .: !: • ., 1.4 Whether,: tUe^Tnbunal •was, justifie^^ cQnelusiQH by conste irreleva^'and.partly.releyant.•';:'^/,/:':;.•:', 1.5 Whethei-^ & conjectures, surrruses:/arul'partlyonev^ence.''-^;'':';ji:j. 1.6 Whether on the facts and in the:\ca-cumstances of case fhe order by tbe Tribunal is illegal atid was not baged on any reliable and legally acceptable evldence. " Brief facts, in nutshell, are that the respondent/assessee is engaged in whole sale business of sugar, refined oil, maida, suji, aata, vegetable oil etc. The assessee maintains separate trading accourlt for different items. The Assessing Ofticer made a comparison of gross profit shown in regard to various items and found that there was substantial fall in gross profit percentage in almost all the items. The assessee offered explanation fhat the gross profit could not remain constant every year and the variation was due to competition in business, fluctuation in rates and change of government policy. The regular stock registers with quantitative details were properly inaintained. Because of tough coinpetition the margin of profit was less, however the turnover had increased from Rs. 39.69 Crores to Rs. 53.54 Crores. The Assessing Officer did not agree with the explanation and made a total addition of Rs. 24,45,984/- to the trading results shown by the assessee. Being aggrieved, the assessee filed an appeal before the CIT(A) which was allowed and the addition was deleted. Challenging the order passed by the CIT(A), the Revenue filed I.T.A. No. 328/Nag/2005, which was dismissed vide order date 31st MaTch, 2006, passed by the Income Tax Appellate Tribunal, Nagpur Bench. Hence, the Revenue has filed the instant appeal. The Assessing Officer rejected the books of accounts with the observation that the books of' accounts were given partly but the Assessing Officer has not pointed out as to which book of accounts was not produced. Before the CIT(A) the assessee contended that the main additions were in sugar account and ...-^ .^y**^ '.?'y . ^ t' ^3^i"Bl. ^ R ^\ 6. 7. sugar tax free account and in other acdipunts the additions were very norainal, the proper quantitative rec.ords and stock registera were maintained and theAssessing Officer had not rejected the book results and the books of account were properly produced before the Assessing Officer. The observation of the Assessing Offlcer that books of accounts were produeed partly was incorrect and.in any case, the Assessing Officer has not pointed out as to which books of accounts were not produced and the assessee had achieved much higher tumover over than that of the preceding year, despite increase in competition and the gross profit rate cannot remain constant in different years. It was also mentioned that the gross profit in sugar account in the assessment year 2000-01 was still lower at 0.86% and that was accepted in scrutiny assessment as per order dated 24.3.2003 and the gross profit ofthe yeai' was still better. After hearing the arguments learned C.I.T.fA) deleted the addition raade by the Assessing OfRcer and allowed the appeal against. which the Revenue preferred second appeal before the Tribunal which was dismissed. There are concurrent findings of facts. The Tribunal gave the reasons after considering the submissions and perusing the material available on record. The reasons in dismissing the appeal of the Reveriue given by the Tribunal was that the Assessing Officer has not given any reasons for rejection of the book results shown by the assessee and absolutely, there is no basis for estimation of the gross profit. PurtUer, th'e assessee has shown better turn over as coinpared to the earlier year. The reyenue authority has accepted gross proflt at 0.86% in scrutiny assessment. Fall in gross s c.2 c'19 (/) & c a m' Q. ss '<6 O: ' cw 2; e* L y ^^ & %1 ^ ^ •i-