Ita/693/2009 Of Commissioner Of Income Tax, Kottayam v. M/S.aiswarya Trading Co., Kuttanadu

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 24TH MARCH 2010 / 3RD CHAITHRA 1932 ITA.No. 693 of 2009 --------------------------- [ITA.NO.197/COCH/2002 OF I.T.A.TRIBUNAL,COCHIN BENCH] .................... APPELLANT/RESPONDENT: ---------------------------------------- THE COMMISSIONER OF INCOME TAX, KOTTAYAM. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES), SRI.JOSE JOSEPH, S.C, (INCOME TAX). RESPONDENT/APPELLANT: ---------------------------------------- M/S.AISWARYA TRADING CO.,KUTTANAD, ALAPPUZHA. BY ADV. SRI.A.KUMAR. THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 24/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.Ramachandran Nair & P.S.Gopinathan, JJ. ================================================== I.T.A.693 of 2009 ================================================== Dated this the 24[th] day of March, 2010. JUDGMENT Ramachandran Nair, J. 1.Heard standing counsel for the Revenue, whichfiled the appeal and Adv.Sri.A.Kumar appearingfor the respondent assessee.filed the appeal and Adv.Sri.A.Kumar appearingfor the respondent assessee. 2.The question raised is whether the Tribunal wasjustified in changing the pattern of additionfrom Rs.10 fixed by the officer per litre ofarrack sold and confirmed by the C.I.T (Appeals)to a lumpsum addition of Rs.1,00,000/-. Eventhough the Tribunal is free to fix the income ona rational basis, if accounts are not acceptable,we feel that the facts in this case are peculiarbecause, the assessee conceded net income at Rs.6per litre from arrack business. However, thejustified in changing the pattern of additionfrom Rs.10 fixed by the officer per litre ofarrack sold and confirmed by the C.I.T (Appeals)to a lumpsum addition of Rs.1,00,000/-. Eventhough the Tribunal is free to fix the income ona rational basis, if accounts are not acceptable,we feel that the facts in this case are peculiarbecause, the assessee conceded net income at Rs.6per litre from arrack business. However, the assessing officer rejected the offer and fixedthe net income at Rs.10. Even though the incomefixed got confirmed in first appeal, the Tribunalreversed the same. The Tribunal, however, hasnot stated the basis on which it estimated theaddition at Rs.1,00,000/-. In fact, the Tribunalitself has stated that, for the preceding yearthe income fixed by the Tribunal was at Rs.10 perlitre. Counsel appearing for the assesseecontended that profit vary from year to year andtherefore the same rate of profit may not beobtained in succeeding years. In any case, wenotice that the assessee itself has offered forassessment net income at Rs.6 per litre of arracksold. However, since the assessee is dragged atthree levels of appeals, we feel that theassessee is entitled to some relaxation even fromwhat they have offered. We, therefore, allow theappeal in part by reversing the order of the Tribunal and by directing the assessing officerto estimate net income at Rs.5 per litre ofarrack sold and demand tax from all the parties,in accordance with law. C.N.Ramachandran Nair, Judge. sl. P.S.Gopinathan, Judge.