Shri Vishnu Dutt Goyal v. Commissioner Of Income Tax, N.c.r. Building Statue Circle,Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 139 / 2010 Shri Vishnu Dutt Goyal, C/o Lokesh Oil Mills Pvt Ltd., SitaramBazar, Kesarganj, Ajmer. ----Appellant Versus 1. Commissioner of Income Tax, N.C.R. Building Statue Circle,Jaipur. 2. The A.C.I.T.,, Central Circle, Ajmer. ----Respondents Connected With D.B. Income Tax Appeal No. 118 / 2010 Shri Vishnu Dutt Goyal, C/o Lokesh Oil Mills Pvt Ltd., Sitaram Bazar, Kesarganj, Ajmer. ----Appellant Versus 1. Commissioner of Income Tax, N.C.R. Building Statue Circle, Jaipur. 2. The A.C.I.T.,, Central Circle, Ajmer. ----Respondent D.B. Income Tax Appeal No. 140 / 2010 Shri Vishnu Dutt Goyal, C/o Lokesh Oil Mills Pvt Ltd., Sitaram Bazar, Kesarganj, Ajmer. ----Appellant Versus 1. Commissioner of Income Tax, N.C.R. Building Statue Circle, Jaipur. 2. The A.C.I.T.,, Central Circle, Ajmer. ----Respondent _____________________________________________________ For Appellant(s) : Mr. Priyesh Kasliwal For Respondent(s) : Mr. Sameer Sharma on behalf Mr. Anil Mehta _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE DR. JUSTICE VIRENDRA KUMAR MATHURJudgment Per Hon’ble Jhaveri, J. 29/05/2017 1.By way of these appeals, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeals of the assessee confirming the order of theAssessing Officer and CIT(A). 2. This Court while admitting the appeal No.139/2010 on 07.04.2010 has framed the following substantial question of law: “Whether, any addition can be made byestimating alone gross profit on sales,where, the purchases and sales shown bythe appellant are duly accepted, as done bythe lower authorities, while making thetrading addition of Rs.10,27,792/- byinvoking the provisions of section 145(3) ofthe Act and by estimating alone gross profitrate on sales such addition sustained by theTribunal, can be said to be proper?” 2.1 This Court while admitting the appeal No.118/2010 on 19.03.2010 has framed the following substantial question of law: “Whether, any addition can be made byestimating alone gross profit on sales,where, the purchases and sales shown bythe appellant are duly accepted, as done bythe lower authorities, while making thetrading addition of Rs.9,16,813/- byinvoking the provisions of section 145(3) ofthe Act and by estimating alone gross profitrate on sales such addition sustained by theTribunal, can be said to be proper?” 2.2 This Court while admitting the appeal No.140/2010 on 07.04.2010 has framed the following substantial question of law: “Whether, any addition can be made byestimating alone gross profit on sales,where, the purchases and sales shown bythe appellant are duly accepted, as done bythe lower authorities, while making thetrading addition of Rs.9,07,641/- byinvoking the provisions of section 145(3) ofthe Act and by estimating alone gross profitrate on sales such addition sustained by theTribunal, can be said to be proper?” 3.We have heard counsel for the parties. 4.In view of the concurrent finding of all the authorities belowand the finding arrived at by the Tribunal taking into considerationthe Gross Profit rate of the previous year, which reads as under: 2.2 This Court while admitting the appeal No.140/2010 on 07.04.2010 has framed the following substantial question of law: “Whether, any addition can be made byestimating alone gross profit on sales,where, the purchases and sales shown bythe appellant are duly accepted, as done bythe lower authorities, while making thetrading addition of Rs.9,07,641/- byinvoking the provisions of section 145(3) ofthe Act and by estimating alone gross profitrate on sales such addition sustained by theTribunal, can be said to be proper?” 3.We have heard counsel for the parties. 4.In view of the concurrent finding of all the authorities belowand the finding arrived at by the Tribunal taking into considerationthe Gross Profit rate of the previous year, which reads as under: “7.Considering the above submissions wefind that though the contention of the ld.A/R remained that audit report mentioningabout opening stock, purchases and sales,closing stock etc. as per Annexure ‘D’thereto was filed with the return of incomeand further that stocks have beenmaintained by the assessee in the dulyaudited ledger account itself, but it is alsoan admitted fact in the present cases forthe assessment years under considerationthat despite opportunity the assessee failedto furnish ledger account. Books of account,etc. before the AO and thus the AO, wasjustified in drawing inference that the samewere not maintained by the assessee. Thefinding of the ld. CIT(A) that audit reportannexed with the return of income revealsthat appellant had not maintained any stockregister, valuation of closing stock has alsonot been controverted by the assessee.Under the above circumstance the ld.CIT(A) in our view was also justified incoming to the conclusion about filing ofledger book for the first time before himthat it was nothing but an after thought,which can not be relied upon the facts ofthe case of the assessee in this regard in A.Y rs. 1997-98 and 1998-99 (Supra) asrelied upon, were distinguishable as inthose years assessee was able to furnishledger book before the A.O., hence decisionofthe Tribunal in those years can not be relevantfor the present years. The assessee alsofailed to furnish stock register etc. beforethe AO as required by him. Under thesecircumstances, we are of the view that theAO was justified in coming to the conclusionthat the book result was not verifiable andhe had rightly rejected the books of accountby invoking the provisions of section 145 ofthe Act to estimate the profit. The AOestimated the sales and applied g.p. rate of6% thereupon. The AO has however,applied the g.p. rate at 6% on the basis ofg.p. rate shown by M/s. Ajmer FeedProducts and M/s. Manohar Feed Productswho are manufacturer of Poultry feed.Whereas the assessee is a simple wholesaletrader and their g.p. Rate is not comparablewith the assessee. It was further contendedthat before making the basis of applicationof g.p. rate on the result shown by thosefirms, the assessee was not givenopportunity by the AO to confront thesame. Accepting this contention of theassessee and that in earlier year, theassessee had shown g.p. rate of 5.80% andthere is increase in turnover of the assesseeduring the year under consideration as wellas considering the totality of facts andcircumstances of the present case, the ld.CIT(A) in our view has rightly held itreasonable to apply g.p. rate of 5% on thedeclared sales during the years. Sinceconsidering all the facts and circumstancesas well as contention of the assessee whichhave been reiterated before us as well, weare of the view that ld. CIT(A) has alreadygiven sufficient relief by applying g.p. rateof 5% on the declared sales instead ofestimated sales by the AO, hence we arenot inclined to interfere with the same. Thefirst appellate order in this regard in thusupheld. Ground No. 2 is accordinglyrejected.” 5.Therefore, no error is said to have been committed by theTribunal in its order. 6.In that view of the matter, the issue is answered in favour ofthe assessee and against the department. 7.The appeals stand allowed. 8.A copy of this judgment be placed in each file. (VIRENDRA KUMAR MATHUR),J. (K.S. JHAVERI),J. Asheesh Kr. Yadav/62-64