ITA No.244 of 2008 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 244 of 2008 Date of decision: 11.9.2008 M/S Vikas W.S.P.limited -----Appellant Vs. CIT, Aayakar Bhawan, Hissar -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE AJAY TEWARI Present Dr. Rakesh Gupta, Advocate for the appellant. JUDGMENT: 1. The assessee has preferred this appeal under section 260-A of the Income Tax Act, 1961 (in short, ‘the Act’) against the orders of ITAT, New Delhi, ‘G’ Bench in ITA No.739/Del/2004 dated 29.6.2007 for the assessment year 1995-96, proposing to raise following substantial questions of law:- “1. Whether the ITAT was justified in concurring with the action of the AO in disturbing the trading result without rejecting books of accounts under section 145 and more so when ITAT itself recorded in the last para of its order that proper books of Accounts have been maintained? 2. Whether the ITAT was justified in concurring with the action of the AO in confirming the trading 1 ITA No.244 of 2008 addition by notionally enhancing sale price without there being any evidence of more sale consideration passing to the assessee, more so in the absence of the provision on the lines of section 40A(2), and more so when similar additions having been deleted have been accepted by revenue and ITAT having recorded in its order in the last para that proper books of accounts have been maintained? 3. Whether on the facts and in the circumstances of the case the ITAT was justified on facts and in law in reversing a well versed, detailed and speaking order passed by CIT (A) without considering the explanations and materials on record, evidences comparative cases, comparative bills and vouchers, stock registers, views of expert authors and comparative cases of various national and international companies involved in the same trade, merits of the case which is factually and also legally bad in law? 4. Whether the ITAT was justified in reversing the order of CIT(A) without appreciating the findings on facts and evidences on record? 5. Whether the order passed by ITAT is perverse and liable to be quashed?” 2. The assessee is engaged in manufacture of Gaur Gum Pulverized by using guar seeds as raw material. Guar seeds are split into dal and in the process Churi and Chorma are obtained and sold in the market. The guar split dal is used as raw material for production of Guar Gum. The assessee filed return declaring 2 ITA No.244 of 2008 Nil income on the basis of profit derived from 100% EOU exempt under section 10-B of the Act. The Assessing Officer found that the assessee had transferred guar splits at the rate of Rs.825/- per quintal. The Assessing Officer asked the assessee to explain its claim showing sale of the said item at the rate of Rs.431/- per quintal as against normal rate which was higher. The Assessing Officer accordingly made addition on that account in the total income of the assessee. The CIT(A) partly accepted the appeal of the assessee by applying the rate of Rs.550/- per quintal. The assessee as well as the revenue preferred appeals before the Tribunal. The Tribunal dismissed the appeal of the assessee and partly allowed the appeal of the revenue by observing that the CIT (A) was not justified in making addition of Rs.13377/- in respect of transfer of goods on 30.9.1994 and 30.12.1994, though the CIT(A) was justified in deleting addition of Rs.3,86,623/- on account of transfer of raw splits from DTA to EOU at the rates lower than the market rates. 3. We have heard learned counsel for the appellant and perused the record. 4. Only contention raised on behalf of the assessee is that the books of account of the assessee having not been rejected, the Assessing Officer could not make any addition. The addition 3 ITA No.244 of 2008 could be made only by way of best judgment assessment and not otherwise. 5. We do not find any merit in this contention. 6. Scope of best judgment assessment by rejecting books of account is different from the scope of assessment by not accepting any particular entry. No doubt, during the assessment, burden is on the department to show taxability of income but for discharging that burden, it is not necessary that the department leads evidence. On the principle of Section 114 of the Evidence Act, the Assessing Officer can presume existence of any fact which he thinks likely to have happened, regard being had to common course of natural events, human conduct and public and private business, in their relation to the facts of a particular case. If any such presumption is justifiably raised, the assessee may be required to rebut the same. Thus, the Assessing Officer can, from the material on record, reject a particular claim in the return unless the decision of the Assessing Officer can be held to be without any basis or erroneous. The finding recorded by the Assessing Officer to the extent the same has been affirmed by the CIT(A) as well as by the ITAT, unless shown to be perverse, will be a finding of fact. 7. In the present case, the finding recorded by the CIT(A), to the extent the same has been affirmed by the ITAT, has not been shown, in any manner, to be perverse. 4 ITA No.244 of 2008 8. Thus, no substantial question of law sought to be raised by the assessee arises for consideration. 9. The appeal is dismissed. ( ADARSH KUMAR GOEL ) JUDGE September 11, 2008 ( AJAY TEWARI ) gs JUDGE 5