Commissioner Of Income Tax-I, Jaipur v. Kirodi Mal Modi

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No.6/2015 Commissioner of Income Tax-I, Jaipur ----Appellant Versus Kirodi Mal Modi ----Respondent _____________________________________________________ For Appellant(s) : Mr. Aditya Vijay for Mr. Anuroop Singhi For Respondent(s) : Mr. Gunjan Pathak with Ms. Ishita Rawat _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHUR Judgment 14/02/2017 1.By way of this appeal, the appellant has assailed thejudgment and order of the Tribunal whereby Tribunal hasdismissed the appeal preferred by the department and partlyallowed the appeal of the assessee. 2.This court while admitting the appeal has framed followingsubstantial question of law:- "Whether on the facts and circumstances of the caseand in law the Tribunal has erred in applying net profit@ 7.00% of total receipts as against 8% applied by theAO and deleting the consequent addition, even whenthe rejection of books of acccounts was not disputed bythe Tribunal and in previous years the Tribunal itselfhas upheld the application of net profit rate of 8%.?" 3.Counsel for the parties are in agreement that thecontroversy involved in the appeal is squarely covered by thedecision of this court in the case of same assessee in Income Tax Appeal No.713/2008 & other connected cases wherein it has been held as under:- Taking into consideration the fact that the view takenby the tribunal is on the basis of the profit of theassessee for the previous year, in our opinion, no errorwas committed by the tribunal. The view taken by thetribunal is required to be upheld for the purpose ofSection 145(3). 12.The tribunal while considering the same hasdealt with the same in para no.5 which reads asunder:- "Considering the above submissions and keeping inmind that in the assessment year 2004-05, the firstappellate order related to that year has also beenquestioned before us by the revenue, we are of theview that application of N.P. rate at 7.5% subject toallowing of depreciation is reasonable under the factsand circumstances of the present case especiallywhen during the year the assessee has shown betterN.P. rate in comparison to the immediately precedingassessment year i.e. at 7.03%. So far as applicationof provisions of section 145(3) of the Act questionedby the ld. A/R is concerned, we do not find substancetherein because in the very nature of business of theassessee it is not generally possible to support theclaim of expenditure etc. With verifiable evidence. Weorder accordingly. Ground no.1 is, therefore, partlyallowed."mind that in the assessment year 2004-05, the firstappellate order related to that year has also beenquestioned before us by the revenue, we are of theview that application of N.P. rate at 7.5% subject toallowing of depreciation is reasonable under the factsand circumstances of the present case especiallywhen during the year the assessee has shown betterN.P. rate in comparison to the immediately precedingassessment year i.e. at 7.03%. So far as applicationof provisions of section 145(3) of the Act questionedby the ld. A/R is concerned, we do not find substancetherein because in the very nature of business of theassessee it is not generally possible to support theclaim of expenditure etc. With verifiable evidence. Weorder accordingly. Ground no.1 is, therefore, partlyallowed." 4.In that view of the matter, the issue is answered in favour of the assessee and against the department. 5.The appeal stands dismissed. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. Brijesh1.