D.b.income Tax Appeal v. M/S Meera Devi And Party

D.B.INCOME TAX APPEAL NO. 47/2004(Commissioner of Income Tax -II Jodhpur Vs. M/s Meera Devi and Party) DATE : 25.1.2007 HON'BLE MR. RAJESH BALIA,J.HON'BLE MR. CHATRA RAM JAT,J. Mr. Sangeet Lodha, for the appellant. Heard learned counsel for the parties. None present for the respondent assesseedespite notice. The respondent-assessee is a liquorcontractor for wholesale and retail sale for both countryliquor and Indian Made Foreign Liquor and beer. Theassessee has submitted his return for AssessmentYear 1993-94 showing his total Income at Rs.18,27,180/- as per his Profit & Loss Account. The Assessing Officer had rejected thebooks of account on the ground of sale of country liquoras well as Indian Made Foreign Liquor were notvouched and not verifiable and resorted to the bestjudgment assessment. While considering the incomefrom business of country liquor, the Assessing Officermade best judgment of its Income by applying net profitrate higher than the Net Profit declared by theassessee. On the other hand additions in profit and gains from Indian Made Foreign Liquor were made byapplying G.P. Rate on total purchase price. However,after applying G.P.Rate, no exercise for adjustment ofallowable expenditure was made. On appeal the CIT (Appeals) gavesuccessive relief to the Assessee by reducing theincome assessed by the Assessing Officer from bothbusinesses by lump sum amount in each case. On further appeal, the Tribunal deletedentire additions made by the Assessing Officer, thoughhe sustained the order rejecting the books of accounts.It opined that it was the obligation of the AssessingOfficer to have brought on record cogent and relevantmaterial to justify the application of G.P. Rate and N.P.Rate applied by him. In absence of any materialhaving been produced by the Assessing Officer, theresult declared by the Assessee which were betterthan the previous year ought to have been accepted. In coming to this conclusion the Tribunalhad found that when assessee's own results wereavailable before Assessing Officer and when the previous result of the assessee were accepted, thedeclaration of the profit rates for the Assessment Year inquestion much higher than the previous year whenthe conditions of the business remained the same,there was no justifiable reason for making additions byincreasing the rate of profit with reference to otherdistant dealers. However, the Tribunal held that Bookof Account the assessee were rightly rejected. It is pointed out by learned counsel for theappellant that assessee's own case relating to theAssessment Year 1993-94 was subject matter ofD.B.Income Tax Appeal No. 46/2004 raising sameissue in the like facts and circumstances and whichhas been decided on 13.9.2005. The Court found that the case of thepresent assessee arises almost in similar facts andcircumstances in which the case of CIT-II, JodhpurVs. M/s Sunil Talwar Murlidhar & Party, Jodhpur hadarisen which was subject matter of D.B. Income TaxAppeal No. 48/2004. The appeal No. 46/2004 wasdecided in the following terms:- It is pointed out by learned counsel for theappellant that assessee's own case relating to theAssessment Year 1993-94 was subject matter ofD.B.Income Tax Appeal No. 46/2004 raising sameissue in the like facts and circumstances and whichhas been decided on 13.9.2005. The Court found that the case of thepresent assessee arises almost in similar facts andcircumstances in which the case of CIT-II, JodhpurVs. M/s Sunil Talwar Murlidhar & Party, Jodhpur hadarisen which was subject matter of D.B. Income TaxAppeal No. 48/2004. The appeal No. 46/2004 wasdecided in the following terms:- “In our opinion, on the fact of it, it iscontradictory in terms that the veryfoundation on which the books of accountsrejected by the Assessing Officer andwhich order has been affirmed by theTribunal, should be taken to be the basis ofaccepting the assessee's results becauseno material was produced by the AssessingOfficer. It is to set at naught the initialpresumption which at least shifted theburden on the assessee to prove thatresults declared by his books of accountsare still correct. The burden of provingexact facts to sustain the additions made onbest judgment with definiteness is toconvert best judgment, which is in the verynature a guess work, to an assessment inaccordance with rejected books of accountto a definiteness. The Tribunal has failedto consider the undisputed andunquestionable fact on which th AssessingOfficer has proceeded to make theassessment, even the fact was not disputedby the assessee that cost price wasverifiable for a\carrying the guess work,Therefore, in our opinion, the decision ofthe Tribunal in deleting the additions madeby the Assessing Officer is reduced by thecommissioner cannot be sustained in law.” The principle fully governs the facts of thepresent case also. The court after considering that nocriteria emerges from the order of the Assessing Officerin adopting different basis for best judgmentassessment in the case of Country Liquor and IndiaMade Foreign Liquor and not giving any deductions inthe gross profit, the matter requires reconsideration andremitted the case back to the Tribunal for deciding the ARTI appeals afresh in accordance with law.” Following the aforesaid decision, we allowthis appeal. The judgment of the Tribunal is set aside.The case is remitted back to the Tribunal for decidingafresh in accordance with law. No order as to costs. (CHATRA RAM JAT),J. (RAJESH BALIA),J.