Taxc/4/2006 Of Asst.comm.of Income Tax 12 Raipur v. Kewal Kishan Dhuppar

lllf'S ^ HIGH.COlME.OIi'eHHATnStMgaiiBJIASPUR:;%:^';^^: Tax^as& N6. -A af 2006.: ' Appellant ^: ';^ssiSfaiit GornTnissioner of I':~^Versus ..'"•••RaipUr.,:'^-;.'''•••,: 'i~:1 !. .•'1'' :1'-.- :;;'.• •:'•:'.—••.••''. ;.1-:;'.1 •' .\''.,^'••, . 'Shri^'Kewat Kisha.ft.;: Dhuppar c/o' M/s 'HBT:G.E.'Koad..'l':;::'l;Bhagwandas WanakcHand,'•-.•T "• .Maflaii,. •••.'^ ,:.': Suildm^ :;.1 RespolMent , ft & DEKSEeTION26Q^QE:'mEINte©}^'KXACT<ra •DB:HonT3leShriI.M.Quddusi^^•? -:SEH6n'bleShri.N.K,,Agarwal,JJ ' ..--•,I. :i. .:••/• ^':^\:^. .^ Rajegy, ShEtvastava,Sfariding Counsel ior tlie^appellant. ^elabh Dubey, AdvgGafef&rfheresppndey ', -k. ,...-••:- :', ,••"-•'- :.i vQ'KJiS&iOra^ -. . , .^assed/(m^Uis4®ffi'ci^;of'August^^ ': ' ..-:..,,.,• ' .;....;'^ '.. : -'.^, ,-. ,P^''I.::M.,Quddust,^. ^..,:,; Th®instant appealiarrses .fi-d^^^^fe^passed by .the ^Ncome T^ Appellate Tritounal, Nagpur' Beneh,Nagpur,^ in Appeal I.T.A. No. 328/Nag/20Q5:^^^fear'3,002-2003.::', .:.':•:.^::.•:•'•1 •• .: :-.':l:N....-;:r''•-: On 25.8.2006, this'appealwasa^hearing OU(>®IK•foUowing substantial^qySs^ion&oflaw:,' ''-: ,'\. '^.•••'^^^^^^^^ .''1.1Wfaether on facta and in the'eircymstarices^^ the,Tribuitar'waajiustifie^? Gommissibner^ of^'tncoitie •Tsa. ; (Appeals). deleting' jfhe-the,Tribuitar'waajiustifie^? Gommissibner^ of^'tncoitie •Tsa. ; (Appeals). deleting' jfhe-; additiori.of;Rs.;24,45^84/-:madely^^.of\low^gross"proS.f.'1';:..; • :...:' •:/• :: "•'' :;.:;:--^. ^ . l:"? '.••.:':'1':;'L.^'^.of\low^gross"proS.f.'1';:..; • :...:' •:/• :: "•'' :;.:;:--^. ^ . l:"? '.••.:':'1':;'L.^'^1.2 ..WhetUer^n, tKe.,f&ts,andi in' tUe'^rcymst^tte^eofaclusiQttreactea.by.the^^^irrelevaaat e8n^ideralaQiis:^ inadefroni^^^^tte^eofaclusiQttreactea.by.the^^^irrelevaaat e8n^ideralaQiis:^ inadefroni^^^^1.3Whether Qto tHe factS and i .^ "the: Tribunal'^'has' teased its^fflconjectures;orsurnuses.'',,:;r.:.^• .,': •'<.: !: •the: Tribunal'^'has' teased its^fflconjectures;orsurnuses.'',,:;r.:.^• .,': •'<.: !: •1.4Whether,: tUe^Tnbunal •was, justifie^^cQnelusiQHby consteirreleva^'and.partly.releyant.•';:'^/,/:':;.•:',cQnelusiQHby consteirreleva^'and.partly.releyant.•';:'^/,/:':;.•:',1.5Whethei-^ &conjectures, surrruses:/arul'partlyonev^ence.''-^;'':';ji:j.conjectures, surrruses:/arul'partlyonev^ence.''-^;'':';ji:j. ., 1.6Whether on the facts and in the:\ca-cumstances of casefhe order by tbe Tribunal is illegal atid was not baged onany reliable and legally acceptable evldence. " Brief facts,in nutshell,are that the respondent/assesseeisengaged in whole sale business of sugar, refined oil, maida, suji,aata, vegetable oil etc. The assessee maintains separate tradingaccourltfordifferentitems.TheAssessingOfticermadeacomparison of gross profit shown in regard to various items andfound that there was substantial fall in gross profit percentage inalmost all the items. The assessee offered explanation fhat thegross profit could not remain constant every year and the variationwas due to competition in business, fluctuation in rates and changeof government policy. The regular stock registers with quantitativedetails were properly inaintained. Because of tough coinpetition themargin of profit was less, however the turnover had increased fromRs. 39.69 Crores to Rs. 53.54 Crores. The Assessing Officer did notagreewiththeexplanationandmadeatotaladditionofRs. 24,45,984/- to the trading results shown by the assessee.Being aggrieved, the assessee filed an appeal before the CIT(A)which was allowed and the addition was deleted. Challenging theorderpassedbytheCIT(A),theRevenuefiledI.T.A. No.328/Nag/2005, which was dismissed vide order date 31st MaTch,2006, passed by the Income Tax Appellate Tribunal, Nagpur Bench.Hence, the Revenue has filed the instant appeal.The Assessing Officer rejected the books of accounts with theobservation that the books of' accounts were given partly but theAssessing Officer has not pointed out as to which book of accountswas not produced. Before the CIT(A) the assessee contended thatthemainadditionswereinsugaraccountand .^y**^'.?'y^.t' ^3^i"Bl. ^R 6. 7. sugar tax free account and in other acdipunts the additions werevery norainal, the proper quantitative rec.ords and stock registerawere maintained and theAssessing Officer had not rejected thebook results and the books of account were properly producedbefore the Assessing Officer. The observation of the AssessingOfflcer that books of accounts were produeed partly was incorrectand.in any case, the Assessing Officer has not pointed out as towhich books of accounts were not produced and the assessee hadachieved much higher tumover over than that of the precedingyear, despite increase in competition and the gross profit ratecannot remain constant in different years. It was also mentionedthat the gross profit in sugar account in the assessment year2000-01 was still lower at 0.86% and that was accepted in scrutinyassessment as per order dated 24.3.2003 and the gross profit oftheyeai' was still better. After hearing the arguments learned C.I.T.fA) deleted the additionraade by the Assessing OfRcer and allowed the appeal against.which the Revenue preferred second appeal before the Tribunalwhich was dismissed. There are concurrent findings of facts. The Tribunal gave thereasonsafterconsidering thesubmissionsandperusing thematerial available on record. The reasons in dismissing the appealof the Reveriue given by the Tribunal was that the Assessing Officerhas not given any reasons for rejection of the book results shownby the assessee and absolutely, there is no basis for estimation ofthe gross profit. PurtUer, th'e assessee has shown better turn overas coinparedto the earlier year.The reyenue authority hasaccepted gross proflt at 0.86% in scrutiny assessment. Fall in gross