Commissioner Of Income Tax, Rohtak… v. M/S Dabur Bricks Company…

IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH Date of decision: 08.12.2011 (i)ITA No. 107 of 2005 Commissioner of Income Tax, Rohtak…..Appellant vs. M/s Dabur Bricks Company…..Respondent (ii)ITA No. 113 of 2005Commissioner of Income Tax, Rohtak…..Appellant vs. M/s Dabur Bricks Company…..Respondent(iii)ITA No. 114 of 2005 Commissioner of Income Tax, Rohtak…..Appellant vs. M/s Dabur Bricks Company…..Respondent CORAM: -HON’BLE MR. JUSTICE HEMANT GUPTAHON’BLE MR. JUSTICE G.S.SANDHAWALIA Present: - Mr. Inderpreet Singh, Advocate for the appellant.Mr. Sandeep Chabra, Advocate for respondent. HEMANT GUPTA, J This order shall dispose of the above mentionedIncome Tax Appeals filed under Section 260-A of the IncomeTax Act, 1961 (for short the ‘Act’) arising out the order dated5.8.2004 passed by the Income Tax Appellate Tribunal, DelhiBench, Delhi in Income Tax Appeal No. 1570/Del/2004 &Income Tax Appeal No. 1271/DEL/2004 pertaining toassessment year 1995-96 and ITA No. 1571/DEL/2004pertaining to assessment year 1997-98. The revenue has claimed the following substantialquestions of law: - i)On the facts and in the circumstances of thecase, the order of the Hon’ble ITAT is perverse asit is based upon incorrect assumption of fact. ii)On the facts and in the circumstances of thecase, the Hon’ble ITAT has erred in law in holdingthat neither the books of accounts wereconsidered by CIT (A) while in fact no such booksof accounts/purchase/sales vouchers wereproduced before the Ld. CIT(A).iii)On the facts and in the circumstances of thecase, the Hon’ble ITAT has erred in law in holdingthat Sh. Jagjit SIngh was not well conversant withthe consumption of coal over purchase and sale ofbricks as other partners was looking after themanufacturing process of bricks. iv)On the facts and in the circumstances of thecase, the Hon’ble ITAT has erred in law in holdingthat in view of the facts ad circumstances of thecase, the Tribunal was of the view thatmanufacturing result as well as trading resultsshown by assessee in its regular books ofaccounts were not suffering with any infirmity.” A survey under Section 133A of the Act wasconducted on the business premises of the assessee on11.8.1998 when certain loose papers were found. Notice underSection 148 of the Act was issued to the assessee. Theassessee filed his return declaring loss of Rs. 1,47,310/- alongwith trading account, profit and loss account and the balancesheet. When the assessee was called upon to produce thebooks of accounts during the assessment proceedings, theassessee did not produce the books of account or thevouchers. Consequently the assessment proceedings werecompleted under Section 144 of the Act. The Assessing Officerfound that the assessee has manufactured bricks of the valueof Rs 32 lacs. By applying net profit rate of 10%, the profit ofRs. 3,20,000/- was arrived at by the Assessing Officer. The assessee filed an appeal before theCommissioner of Income Tax (Appeals) (for short the ‘CIT(A)’).The learned CIT(A) recorded that before the Assessing Officer,the assessee has not produced any document or books of accounts nor these were produced during the inquiry underSection 131 directed by him under Section 250(4) of the Act.But the learned CIT(A) reduced the amount of income tax byapplying a net profit rate of 6.57%. In further appeal, learnedTribunal returned a finding that infact, the books of accountswere produced before the learned CIT(A) and in view of thesaid finding, accepted the appeal as the books of accountswere not considered by learned CIT(A) along with the purchaseand sale vouchers. The assessee filed an appeal before theCommissioner of Income Tax (Appeals) (for short the ‘CIT(A)’).The learned CIT(A) recorded that before the Assessing Officer,the assessee has not produced any document or books of accounts nor these were produced during the inquiry underSection 131 directed by him under Section 250(4) of the Act.But the learned CIT(A) reduced the amount of income tax byapplying a net profit rate of 6.57%. In further appeal, learnedTribunal returned a finding that infact, the books of accountswere produced before the learned CIT(A) and in view of thesaid finding, accepted the appeal as the books of accountswere not considered by learned CIT(A) along with the purchaseand sale vouchers. The argument of the learned counsel of theassessee before the Tribunal was that complete account bookswere produced before CIT(A) but could not be produced beforethe Assessing Officer. Learned counsel for revenue vehementlyargued that the finding recorded by the Tribunal that thebooks of accounts were produced before the learned CIT(A)suffers from perversity and is based upon incorrect facts. Infact, learned CIT(A) has recorded that the books of accountswere not produced before him but applied reduced net profitrate. A perusal of the order passed by learned CIT(A)does not show that such account books were produced beforehim. Therefore, the Tribunal could not return a finding thatbooks of account were not considered by learned CIT(A) asnothing was produced before him. Such finding recorded by the Tribunal is nothing but perverse, therefore cannot besustained. In view of the said fact, the substantial questions oflaw No. 1 and 2 are answered in favour of the revenue andagainst the assessee. The other questions of law does not arisefor consideration. As a consequence thereof, the matter isremitted back to the Tribunal to decide the appeal afresh onmerits according to law. Disposed of. (HEMANT GUPTA)JUDGE 8.12.2011preeti (G.S.SANDHAWALIA)JUDGE