Arvind Baloni v. Income Tax Appellate Tribunal, Chandigarh And Others

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.712 of 2008 (O&M)Date of decision: 21.8.2009 Arvind Baloni. -----Appellant Vs. Income Tax Appellate Tribunal, Chandigarh and others. -----Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:-Mr. Vishal Gupta, Advocatefor the Assessee.for the Assessee. Ms. Urvashi Dhugga, Standing Counsel for the Revenue. for the Revenue. ----- ORDER: 1.The assessee has preferred this appeal under Section260A of the Income Tax Act, 1961 (for short, “the Act”) againstthe order dated 27.1.2008, Annexure A-3, passed by the IncomeTax Appellate Tribunal, Chandigarh Bench ‘A’, Chandigarh inI.T.A.No.497/CHD/2007 for the assessment year 2004-05,proposing to raise following question of law:- “Whether on the facts and in the circumstances of thecase, the Ld. ITAT was right in law in setting aside theorder of the CIT (Appeals), and partly allowing theappeal of the revenue by making additions ofRs.4,32,000/- as against the additions of Rs.6,52,235/- in spite of the fact that no reasoning forthe same has been given by the ITAT for the samewhile ignoring the rate of profit disclosed by theassessee in the preceding year.” 2. The assessee is manpower supplier. He failed toproduce books of account during assessment. The AssessingOfficer assessed income equal to 5% of the gross receipts. Onappeal, the CIT(A) held that the book results of the assesseeshould have been accepted. The Tribunal restored theassessment made by the Assessing Officer, modifying the sameequal to 4% of G.P. It was held that the CIT(A) was not justifiedin interfering with the assessment when books of account had notbeen produced. No doubt the best judgment assessment couldnot be arbitrary, but some guess work was inevitable. Mere factthat the assessee declared income which was almost equal to theincome assessed in the previous year, could not be conclusive.The assessee had disclosed gross profit of 6.45% and claimeddeductions, even though he was receiving 7% service chargesand was being reimbursed salary, wages, ESI and EPF whichhad been claimed as deductions. The Tribunal reduced theassessed income to 4% of the turnover. 3. We have heard learned counsel for the parties. 4. Learned counsel for the appellant submitted that rate of 4% of the turnover was arbitrary as in the earlier year, theassessee had been assessed at lower income and consistency had to be maintained. Reliance is placed on judgments ofMadhya Pradesh High Court in Assistant Commissioner ofIncome-taxv. Gendalal Hazarilal & Co. (2004) 134 TAXMAN384 (MP) and Madras High Court inR.V.S. & Sons Dairy Farmv. Commissioner of Income-tax(2003) 130 TAXMAN 615(Mad.). 5. We are unable to accept the submission. 6. The rate to be applied, having regard to features of anindividual case, depends on facts of each case. In absence ofreasons being perverse, the finding of the Tribunal is final. Theassessment for the previous year may be a guide but is notbinding for making assessment for subsequent years. Thejudgments relied upon are on individual fact situations. 7. We are unable to hold that any substantial question of law arises. 8. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 21, 2009CHAUDHARY )ashwani ( JUDGE DAYA