Commissioner Of Income Tax, Ludhiana-Ii v. M/S. Ludhiana Industrial Corporation Dhandari Kalan, Ludhiana

IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH I.T.A.No.595 of 2007 DATE OF DECISION: MARCH 11, 2008 Commissioner of Income Tax, Ludhiana-II .....APPELLANT Versus M/s. Ludhiana Industrial Corporation Dhandari Kalan, Ludhiana ....RESPONDENT CORAM:HON'BLE MR.JUSTICE SATISH KUMAR MITTALHON'BLE MR.JUSTICE RAKESH KUMAR GARG--- Present:Mr.Vivek Sethi, Advocate,for the appellant. .. SATISH KUMAR MITTAL, J. The instant appeal filed by the revenue under Section 260Aof the Income Tax Act (hereinafter referred to as `the Act') is directedagainst the order dated 3.3.2005 passed by the Income Tax AppellateTribunal, Chandigarh Bench (B), Chandigarh (hereinafter referred to as`the ITAT') in ITA No.551/Chandi/1999 in case of the respondent-assessee for the Assessment Year 1991-92 by raising two substantialquestions of law out of which counsel for the appellant only presses forthe following substantial question of law for consideration of this Court:- Whether on the facts and in the circumstances of the case, theHon'ble ITAT is right in reducing the G.P. rate from 16.16%to 12.94% ignoring the provisions of Section 132(4A) of theIncome Tax Act, 1961? It is pertinent to mention here that vide aforesaid order passed by the I.T.A.No.595 of 2007 -2- ITAT, two appeals i.e. ITA No.259/Chandi/2000 filed by the assessee forthe Assessment Year 1990-91 and ITA No.551/Chandi/1999 filed by therevenue for the Assessment Year 1991-92, were disposed of by a commonorder as in both the appeals identical question of facts and law wasinvolved. Counsel for the appellant states that ITA No.594 of 2007filed by the revenue raising the similar question of law against the sameorder passed in ITA No.259/Chandi/2000 for the Assessment Year 1990-91, has been dismissed by this Court while observing as under:- “In this case, the Assessing Officer applied the GP rate of15.47% while taking into consideration the trading accountsof the assessee in respect of the manufacturing and tradingsales. On appeal, the Commissioner of Income Tax(Appeals) reduced the said GP rate from 15.47% to 12.94%while taking into consideration the goods returned by theassessee and it was observed that if the said amount isreduced then the GP rate would come to 12.94%. The saidorder was passed by the Commissioner of Income Tax(Appeals) while taking into consideration the materialavailable on the record showing that the consideration of thegoods returned was Rs.2,59,756/- and if the said amount isreduced, then the GP rate would definitely come to 12.94%.The said finding of fact has further been upheld by theIncome Tax Appellate Tribunal while observing as under:- “17. After considering the rival submissions and thematerial available on record, it is noticed that similartransactions had been considered as benami saleproceeds in the case of sister concern, namely, M/s.Single & Co. by the Settlement Commission. Since thenature of transactions was identical, Ld. CIT(A) wasjustified in holding the deposits in the bank accounts assale proceeds and since the GP rate of 12.94% had beenapplied for the regular sales, Ld. CIT(A) was justified inapplying GP rate of 12.94% in respect of unrecordedsales. As regards to the working of initial investment isconcerned, we do not see any infirmity in theobservation of the Ld. CIT(A) that generally three weeksto one month time is required for completing circle ofthe sale. Therefore, he was justified in directing theAssessing Officer to take into consideration three weeks'sale proceeds for the purpose of initial investment andalso to increase the same by the applying GP rate of I.T.A .No.595 of 2007 -3- 12.94%. Considering the totality of the facts as discussedherein above, we do not see any valid ground to interferewith the findings of the Ld. CIT(A).” I.T.A .No.595 of 2007 -3- 12.94%. Considering the totality of the facts as discussedherein above, we do not see any valid ground to interferewith the findings of the Ld. CIT(A).” In view of the aforesaid finding of fact recorded by theCommissioner of Income Tax (Appeals) and the Income TaxAppellate Tribunal, we do not find any ground to interfere inthe same as in our opinion no substantial question of law isinvolved in this appeal. Dismissed.” Since the appeal filed by the revenue against the same order of the ITAT pertaining to the Assessment Year 1990-91 has already beendismissed by this Court, therefore, the present appeal in which the similarissue is involved, is hereby dismissed on the same reasoning. (SATISH KUMAR MITTAL) JUDGE March 11, 2008vkg (RAKESH KUMAR GARG) JUDGE