Commissioner Of Income Tax Jai v. M/S Salimudeen And Party

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 51 / 2007 Commissioner Of Income Tax Jai ----Appellant Versus M/S Salimudeen And Party ----Respondent _____________________________________________________ For Appellant(s) : Mr. K.D. Mathur for Mr. R.B. MathurFor Respondent(s) : Mr. Sudhanshu Joshi _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHURJudgment 31/01/2017 1.By way of this appeal, the Department has assailed thejudgment and order of the Tribunal whereby Tribunal hasdismissed the appeal of the Revenue and cross objections of theassessee are also dismissed and the order of CIT(A) is alsoupheld. 2.This court while admitting the appeal on 4.12.2007 had framed following substantial questions of law:- “Whether in the facts and circumstances of thecase, the ITAT and CIT(A) were justified in law inrestricting the additions without assigning anyreasons when the invoking of the provisions ofSection 145 of the Act has been upheld? Whether in the facts and circumstances of thecase, the ITAT has not acted perversely inreducing and restricting the trading additionswithout assigning any reasons and makingestimation over estimation.” the business of liquor sale in Gudamalani (rural area in Barmer).The assessee filed its return of income of Rs.2,54,040/- in thestatus of AOP along with Audit Report u/s 44AB of the Income-taxAct along with Trading A/c, P&L A/c and Balance Sheet. TheAssessing Officer noticed that the assessee did not issue sale billsto its customers and as such the sales were not vouched and noquantitative tallies could be made however, he mentioned that thepurchases of country liquor as well as IMFL and Beer were fullyverifiable. He further mentioned that the assessee had shownsales in the manner which suited it. Further, that the assessee’sclaim of various expenses was also not verifiable as no propervouchers had been maintained. No stock register was maintained.Further, there was no control over the sale price of the countryliquor. Therefore, the accounts maintained by the assessee neithershown true results nor were found acceptable for the purpose ofincome-tax assessment. The assessee was therefore asked toshow cause as to why the provisions of section 145(3) of the Actbe not applied. In reply, the assessee submitted that seeing thenature of trade preparing and issuing of bills was next toimpossible not only during the year under consideration but last somany years the sales were recorded on the reported basis. TheAuditor who audited the accounts of the assessee had alsomentioned the same in his audit report. Most of the sales of liquorwere affected in the two hours in the evening time and duringthose rush hours it was not possible for the salesman to preparethe sale bills and issuing the same to the customers. 4.Learned counsel for the appellant Mr. K.D. Mathur submitsthat controversy involved in this case is squarely covered by theDivision Bench judgment of this Court in Commissioner of IncomeTax vs. Ram Singh & ors. reported in (2014) 363 ITR 417 (Raj.)wherein it has been held as under:- "(i) that as regards the rejection of books ofaccount, cogent reasons had been assigned by all three income-tax authorities. The rejection ofaccounts was justified. (ii) That in respect of the estimates of incomethere was no recording of fact, and there was nodiscussion about any comparable cases or pasthistory or working for the ad hoc additions anddeletions. There was no reason assigned as towhy the Tribunal did not agree with the findingsrecorded by the Assessing Officer or theCommissioner (Appeals). The judgments of theTribunal being stereotyped non-speaking,unreasoned, arbitrary and whimsical, there wasno option except to remand the matter back tothe Tribunal." "(i) that as regards the rejection of books ofaccount, cogent reasons had been assigned by all three income-tax authorities. The rejection ofaccounts was justified. (ii) That in respect of the estimates of incomethere was no recording of fact, and there was nodiscussion about any comparable cases or pasthistory or working for the ad hoc additions anddeletions. There was no reason assigned as towhy the Tribunal did not agree with the findingsrecorded by the Assessing Officer or theCommissioner (Appeals). The judgments of theTribunal being stereotyped non-speaking,unreasoned, arbitrary and whimsical, there wasno option except to remand the matter back tothe Tribunal." 5.Counsel for the respondent has not disputed the aforesaidfactual matrix. 6.In that view of the matter, the matter is required to beremitted back to the Tribunal in view of the decision of this court. 7.Both the issues are required to be answered in favour of theDepartment and against the assessee. 8.Accordingly, the appeal stands disposed of. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. Brijesh 77.