1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR -------------------------------------------------------- INCOME TAX APPEAL No. 132 of 2006 C.I.T. V/S M/S SHRI SINDHUJA FOODS PVT.LTD. Mr. KK BISSA, for the appellant / petitioner Mr. ARUN BHANSALI, for the respondent Date of Order : 24.10.2008 HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J. ORDER ----- This appeal has been filed by the Revenue seeking to challenge the order of the I.T.A.T. dt. 20.1.2006. The appeal was admitted on 12.12.2006 by framing the following substantial question of law:- “Whether the order of ITAT is vitiated on account of non-consideration of material evidence and consideration of totally irrelevant material in reducing the additions made in the accounts of assessee by assessing officer?” The necessary facts are that the assessee filed the return which was taken up for scrutiny, and notices were issued under Section 143(2). Thereafter the assessment order was passed by the learned Assessing Officer finding discrepancy in the purchase of raw material. Likewise 2 discrepancy was also found in the sale of the product, in the sense that the sale shown by the assessee was found to be not confirmed by the respective purchasers, inasmuch as one purchaser was shown to have sold the goods worth Rs. 2300/- but the purchaser had denied. Likewise about other purchaser the assessee had shown to have sold goods worth Rs. 1,31,725/- but the purchaser has confirmed only Rs. 77125/-. Thus, on the other hand, the excessive sale was shown by the assessee. However, the Assessing Officer made additions. The assessment order was challenged in appeal. The learned Commissioner partly allowed the appeal, and reduced the addition. Both the parties filed appeals in the Tribunal. The learned Tribunal found that it was not in dispute that the assessee had recorded bogus purchase in his books of accounts, it was found that bogus purchase was shown with a view to show excessive expenses in the purchase of raw material. However, the books of accounts as rejected by the authorities below was upheld. The next question was considered about the determination of gross profit rate, and the learned Tribunal considered the fact that in the previous year the Gross Profit rate applied was 7.09%, and the same was applied by the learned Commissioner this year also, that was upheld. For the purpose of satisfying the question as 3 formulated the learned counsel for the Revenue could not show as to what material has not been considered by the learned Tribunal, and what irrelevant material has been considered in reducing the additions made. Rather an over all consideration of the orders of the Assessing Officer, the Commissioner, and the learned Tribunal does show, that on account of the assessee having shown bogus purchases, the books of accounts had been rejected, and the matter was proceeded under Section 145. Then, the question remained of determining the income on the basis of best judgment assessment. At this point, it is significant to note, that the gross sales figures for the relevant year is not in controversy, in the sense, that whatever bogus sales have been found by the Assessing Officer, if they were to be considered literally, they would have reduced the figure of sale, and there is no material or finding, or any indication, to show that the gross sale was shown by the assessee at any deflated figure. In that view of the matter for making best judgment assessment the only relevant thing, required to be considered was, application of particular gross profit rate, which has been applied by the learned Tribunal, and the learned Commissioner, on relevant consideration, being the gross profit rate applied in the last year. Thus, in our view, it cannot be said that any 4 material evidence has not been considered, or any irrelevant consideration has been taken into account by the learned Tribunal. Thus, the question as framed is answered against the Revenue in favour of the Revenue. The appeal thus has no force, and is dismissed. ( KISHAN SWAROOP CHAUDHARI ),J. ( N P GUPTA ),J. /Sushil/