M/S Rajan Products, R-78 Parbatpura, Ajmer v. Commissioner Of Income-Tax, Ajmer

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 139 / 2005 M/S Rajan Products, R-78 Parbatpura, Ajmer. Versus 1.Commissioner of Income-Tax, Ajmer. ----Appellant 2.The ACIT, Investigation Circle, Ajmer. ----Respondent _____________________________________________________ For Appellant(s) :Mr. P.K. Kasliwal. For Respondent(s) :Mrs. Parinitoo Jain. _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHURJudgment Per Hon’ble Jhaveri J.10/01/2017 1. By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasconfirmed the order of the CIT(A) and sustained the addition ofRs.78552/-. 2.Counsel for the appellant has contended that the CIT(A) andthe Tribunal have seriously committed an error in estimating thelow GP in spite of the fact that the Sales Tax and the Excise whichhave been paid under the statutory liability has been confirmed bythe books of accounts and while observing, the CIT(A) itself atpage 28 in para 4.1 has partly allowed as under: “Even if the books results are notconsidered reliable the entire facts andcircumstances are required to be consideredand in this case specifically no item ofexpenditure has been pointed out inadmissible or unverifiable or any purchasedand sales have been found to beunverifiable. The A.O. has made theestimate of sales without any basisparticularly when the sales are accepted bysales Tax department, and manufacturing ofthese item is also subject matter or centralexcise. Therefore, in my view, the grossprofit rate of 10% as applied by the A.O. isreasonableondeclaredsalesofRs.1,48,78,000/- and this means the grossprofit of 14,87,800/- thus the sustainableadditionwouldbeRs.78,552(Rs.14,87,800-1409248). The appellantwill get a relief of Rs.2,12,200/.” 3.Taking into consideration the books of accounts andobservation at page 47 in para 6 of the Tribunal, the additionwhich has been upheld by the CIT(A) ought to have been deletedby the Tribunal. Para 6 reads as under: “As stated earlier that no defects in thebooks of account were found but factremains that during the assessment yearunder consideration, the gross profit rate isshown by the assessee at 9.47% incomparison to the earlier year where it wasshown at 9.64%. In the facts andcircumstances of the case, the order of theCIT(A) appears more reasonable. Hence, weupheld the order of the CIT(A) by dismissingground No.1 of the assessee as well as ofthe department.” 4.Counsel for the appellant has therefore, contended that merely on low GP the income would not be estimated since booksof accounts has been upheld by both the authorities. 5.Counsel for the respondent has justified the order of theTribunal and contended that the view taken by the Tribunal andCIT(A) is just and proper. 6.We have heard counsel for both the sides. 7.Taking into consideration the fact that the Sales Tax andExcise Duty are the statutory liability which has not been disputedand the books of accounts are not disputed, in our view thecontention which has been raised by the appellant is required tobe accepted. The addition of Rs.78552/- only on the ground oflow GP cannot be estimated without any basis. 8.In that view of the matter, the issue is answered in favour ofthe assessee and against the department.the assessee and against the department. 9.The appeal stands allowed. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. Asheesh Kr. Yadav/68