IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 24TH MARCH 2010 / 3RD CHAITHRA 1932 ITA.No. 693 of 2009 --------------------------- [ITA.NO.197/COCH/2002 OF I.T.A.TRIBUNAL,COCHIN BENCH] .................... APPELLANT/RESPONDENT: ---------------------------------------- THE COMMISSIONER OF INCOME TAX, KOTTAYAM. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES), SRI.JOSE JOSEPH, S.C, (INCOME TAX). RESPONDENT/APPELLANT: ---------------------------------------- M/S.AISWARYA TRADING CO.,KUTTANAD, ALAPPUZHA. BY ADV. SRI.A.KUMAR. THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 24/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.N.Ramachandran Nair & P.S.Gopinathan, JJ. ================================================== I.T.A.693 of 2009 ================================================== Dated this the 24th day of March, 2010. JUDGMENT Ramachandran Nair, J. 1.Heard standing counsel for the Revenue, which filed the appeal and Adv.Sri.A.Kumar appearing for the respondent assessee. 2.The question raised is whether the Tribunal was justified in changing the pattern of addition from Rs.10 fixed by the officer per litre of arrack sold and confirmed by the C.I.T (Appeals) to a lumpsum addition of Rs.1,00,000/-. Even though the Tribunal is free to fix the income on a rational basis, if accounts are not acceptable, we feel that the facts in this case are peculiar because, the assessee conceded net income at Rs.6 per litre from arrack business. However, the ITA 693/09 -:2:- assessing officer rejected the offer and fixed the net income at Rs.10. Even though the income fixed got confirmed in first appeal, the Tribunal reversed the same. The Tribunal, however, has not stated the basis on which it estimated the addition at Rs.1,00,000/-. In fact, the Tribunal itself has stated that, for the preceding year the income fixed by the Tribunal was at Rs.10 per litre. Counsel appearing for the assessee contended that profit vary from year to year and therefore the same rate of profit may not be obtained in succeeding years. In any case, we notice that the assessee itself has offered for assessment net income at Rs.6 per litre of arrack sold. However, since the assessee is dragged at three levels of appeals, we feel that the assessee is entitled to some relaxation even from what they have offered. We, therefore, allow the appeal in part by reversing the order of the ITA 693/09 -:3:- Tribunal and by directing the assessing officer to estimate net income at Rs.5 per litre of arrack sold and demand tax from all the parties, in accordance with law. C.N.Ramachandran Nair, Judge. sl. P.S.Gopinathan, Judge.