M/S R.s. Industries v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR. D.B. Income Tax Appeal No.20/2003 M/s R.S. Industries vs. The Assistant Commissioner of Income Tax. DATE OF ORDER ::: 02.11.2016 HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE MAHENDRA MAHESHWARI Mr. A.Kasliwal for the appellant.Mr. Nikhil Simlote for the respondent/s. 1.By way of this appeal, the appellant hasassailed the judgment & order of the Tribunalwhereby the Tribunal has partly allowed the appealfiled by the assessee and revenue appeal was fullyallowed. 2.This court while admitting the matter hasframed the following question of law:- "(i) Whether the Income Tax AppellateTribunal acted perversely in settingaside the finding of the CIT(A)without any material on record andenhancing the gross profit rate onresale account to 10% from 3% ?." 3. The Tribunal has in para 13 observed as under:- “13.We have heard the rival partiesand have perused the materialavailable on record. In thisconnection, it is observed that theadmitted fact of this case are thatbooks accounts were rejected evenin earlier years. The manufacturingaccount clearly shows that it isnot reflecting the true affairs ofthe assessee, raw material andmanufacturing of finished product.Books of accounts of the assesseewere, therefore, rejected onaccounted on account of higherburning loss and g.p. Rate wasapplied. For the assessment year1985-86,underthesimilarcircumstances, gross profit rate of10% was upheld by the firstappellate authority and which wasfinally accepted by the assessee.We have allowed relief to theassessee on account of claim of burning loss but at the same timefeel that if the totality of thecircumstances is taken into accountthe g.p. Rate at 10% would not onlybe reasonable but justified onaccount of the allowance of theburning loss. Since the resaleaccount is no verifiable andidentifiable, we do not consider itreasonable to restrict the sales onthat account at 3%. The Id A.R. hasalso not placed any material onrecord to prove the argument ofrevenue that resale account is notverifiable.Underthecircumstances, we direct that theg.p. rate be taken at 10% withoutbifurcating the account into 2 or 3parts. This ground of appeal takenby the assessee, therefore, standsdismissed and the appeal on thisaccount filed by the revenue in ITANo. 713/JP/98 stands allowed. Weorder accordingly.” 4.Though requisite order of the AO and Tribunalor Appellate Authority is not record, counsel forthe appellant is not in a position to refute theobservations made by the Tribunal in para 13referrred herein above. 5.In that view of the matter, we are in completeagreement with the view taken by the Tribunal, theissue is answered in favour of the departmentagainst the assessee.6.The appeal is accordingly dismissed. (Mahendra Maheshwari), J. (K.S. Jhaveri), J.