M/S Chaudhary Oils v. Income Tax Officer

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 150 / 2004 M/S Chaudhary Oils ----Appellant Versus Income Tax Officer ----Respondent _____________________________________________________ For Appellant(s) : Mr. Anant Kasliwal For Respondent(s) : Ms. Parinitoo Jain _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Order 09/05/2017 1.By way of this appeal, the appellant has assailed thejudgment and order of the Tribunal whereby the Tribunal hasallowed the appeal preferred by the department modifying theorder passed by CIT(A). 2.This Court while admitting the matter has framed thefollowing question of law:- “i) Whether in the facts and circumstances the ITATwas justified in law in having upheld/restored ahuge addition of Rs. 10 lacs to the declared tradingresults of the appellant in a situation where theRevenue Authorities have not invoked the provisionsof Sec. 145(2) of the I.T. Act, 1961 at all andwhether the finding of the Tribunal is perverse?” 3.The facts of the case are that the assessee filed return ofincome for the year 1997-98 on 28[th] November, 1997 he has declared total loss of rupees 14,10,846/, which includes loss frombusiness of Rs. 3,22,075/- and loss on account of depreciation ofRs. 1,08,871/-. The assessee being aggrieved by the additionmade by the AO preferred an appeal before CIT(A) which hasallowed the appeal preferred by the assessee and restricted theaddition to the extent of Rs. 2,95,335/- and has granted relief tothat extent.. 4.The Tribunal while considering the appeal has modified theorder without any valid reason. The Tribunal in para 5, 6 & 7observed as under:- “5. From the record, it appears that assessee hasshown 2238275 Kgs. Of Sarson crushed anddisclosed. The AO found it woo low. However, theCIT(A) finally observed that 153023 Kgs. Sarson wascrushed outside the books of accounts which islooking too low due to peculiar facts andcircumstances of the case as mentioned in the AO’sorder and specifically that the discrepancies pointedout by the AO and accepted by the CIT(A).shown 2238275 Kgs. Of Sarson crushed anddisclosed. The AO found it woo low. However, theCIT(A) finally observed that 153023 Kgs. Sarson wascrushed outside the books of accounts which islooking too low due to peculiar facts andcircumstances of the case as mentioned in the AO’sorder and specifically that the discrepancies pointedout by the AO and accepted by the CIT(A). 6. In the light of the above discussion and bykeeping in mind the doctrine of equity, justice andgood conscious, we modify both the orders of lowerauthorities and restrict the addition to Rs.10,00,000/. Thus, the assessee will get the relief ofRs. 6,00,279/- from the order of the AO.keeping in mind the doctrine of equity, justice andgood conscious, we modify both the orders of lowerauthorities and restrict the addition to Rs.10,00,000/. Thus, the assessee will get the relief ofRs. 6,00,279/- from the order of the AO. 7. In the result, the appeal filed by the department ispartly allowed as stated above and the Cross-objection filed by the assessee is dismissed asannounced the open court.”partly allowed as stated above and the Cross-objection filed by the assessee is dismissed asannounced the open court.” 5.Counsel for the appellant contended that Tribunal hasseriously committed an error in setting aside the order of CIT(A)which is well reasoned judgment and wrongly relied uponjudgment 28[th] February, 2001 which has been reversed by thisCourt. 6.Counsel for the respondent was not in a position to justify the reasoning adopted by the Tribunal and the judgment which issought to be relied upon has been reversed by this Court. 7. In the result, the appeal filed by the department ispartly allowed as stated above and the Cross-objection filed by the assessee is dismissed asannounced the open court.”partly allowed as stated above and the Cross-objection filed by the assessee is dismissed asannounced the open court.” 5.Counsel for the appellant contended that Tribunal hasseriously committed an error in setting aside the order of CIT(A)which is well reasoned judgment and wrongly relied uponjudgment 28[th] February, 2001 which has been reversed by thisCourt. 6.Counsel for the respondent was not in a position to justify the reasoning adopted by the Tribunal and the judgment which issought to be relied upon has been reversed by this Court. 7.Taking into consideration, the reasoning adopted by theCIT(A), the Tribunal has seriously committed an error. 8.We are in complete agreement with the view taken by theCIT(A). The issue is answered in favour of the assessee againstthe department. 9.The appeal stands allowed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. A.Sharma/1