M/S. Pansari Gems International v. Commissioner Of Income Tax-Ii, Jaipur

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANAT JAIPUR BENCH, JAIPUR JUDGMENT D.B. INCOME TAX APPEAL NO. 225/2010 M/S. PANSARI GEMS INTERNATIONALVS. COMMISSIONER OF INCOME TAX-II, JAIPUR. DATE OF JUDGMENT : 01.03.2012 HON'BLE THE CHIEF JUSTICE MR. ARUN MISHRA'HONBLE MR. JUSTICE NARENDRA KUMAR JAIN-I Mr. N.L. Agrawal, for the appellant.Mr. R.B. Mathur, for the respondent. Heard on question of admission as well as interimstay. 2.The appeal has been preferred under Section 260Aof the Income Tax Act, 1961, questioning the order dated26.10.2009 passed by CIT(A) and order dated 19.03.2010passed by the ITAT. For the assessment year 2006-07, theAssessing Officer applied gross profit rate of 19.43% asagainst the gross profit rate of 15.79% declared by theassessee. The CIT(A) upheld the application of gross profitrate @ 17%. The Revenue filed an appeal before the ITATagainst the reduction in comparison to gross profit of 17% asagainst 19.43%, while the assessee in appeal raised thequestion of gross profit rate of 15.79% declared by it insteadof 17% determined by the CIT(A). The question involved inboth the appeals before ITAT was with respect to gross profit rate, the ITAT, after considering all the facts andcircumstances of the case, arrived at the finding of gross profitrate of 17% to be reasonable. The appeals of Revenue as wellas assessee had been dismissed by the ITAT. Consequently,the assessee has come up in the present appeal before us. 3.Mr. N.L. Agrawal, counsel appearing on behalf ofthe appellant-assessee has submitted that findings recordedby the CIT(A) as well as ITAT cannot be said to be inaccordance with law. Books of accounts of the assessee couldnot have been rejected on the ground, it has been rejected.Gross profit rate of 15.79%, declared by the assessee, oughtto have been accepted. 4.After considering submissions of counsel appearingon behalf of the appellant, we find that discussion made by theITAT is appropriate. The ITAT has taken into considerationthe various factors, on which the gross profit rate isdependent, i.e. on the cost of purchases and sales. Theassessee had filed a chart showing purchases and sales of 35items. In these items, the rate of profit has varied from6.32% to 26.45%. The gross profit on sales to the extent ofRs. 59,40,181/- is around 13%. The total turnover during theyear under reference is Rs. 8.86 crores. The ITAT has heldthat gross profit rate does not depend on the basis ofspecification of item, but it depends upon the quality, shineetc. The assessee has earned gross profit varied from 6.32%to 26.45%, but from the chart filed by the assessee, it cannotbe concluded that gross profit rate declared by the assesseewas correct. Assessing Officer has found that purchases were not fully verifiable. The books of accounts were rejected forvarious reasons. Previous year also gross profit rate was18.87% and this year, it has been accepted at 17% by the CIT(A) and the order passed by the CIT(A) has been affirmed bythe ITAT. In view of the reasons assigned by the CIT(A) aswell as the ITAT in its orders, we find that no substantialquestion of law arises in the present appeal. The facts of thecase and the evidence have been properly appreciated by theCIT(A) as well as the ITAT. 5.Consequently, the appeal is bereft of merits andthe same is, accordingly, dismissed. The stay application isalso dismissed. (NARENDRA KUMAR JAIN-I),J. (ARUN MISHRA),CJ. Manoj “All corrections made in the judgment/order have beenincorporated in the judgment/order being emailed.” MANOJ NARWANIJUNIOR PERSONAL ASSISTANT.