C I T vs. M/S LUDHIANA INDUSTRIAL CORP.

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A.No.595 of 2007 DATE OF DECISION: MARCH 11, 2008 Commissioner of Income Tax, Ludhiana-II .....APPELLANT Versus M/s. Ludhiana Industrial Corporation Dhandari Kalan, Ludhiana ....RESPONDENT CORAM: HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG --- Present: Mr.Vivek Sethi, Advocate, for the appellant. .. SATISH KUMAR MITTAL, J. The instant appeal filed by the revenue under Section 260A of the Income Tax Act (hereinafter referred to as `the Act') is directed against the order dated 3.3.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (B), Chandigarh (hereinafter referred to as `the ITAT') in ITA No.551/Chandi/1999 in case of the respondent- assessee for the Assessment Year 1991-92 by raising two substantial questions of law out of which counsel for the appellant only presses for the following substantial question of law for consideration of this Court:- Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is right in reducing the G.P. rate from 16.16% to 12.94% ignoring the provisions of Section 132(4A) of the Income Tax Act, 1961? It is pertinent to mention here that vide aforesaid order passed by the I.T.A -2- ITAT, two appeals i.e. ITA No.259/Chandi/2000 filed by the assessee for the Assessment Year 1990-91 and ITA No.551/Chandi/1999 filed by the revenue for the Assessment Year 1991-92, were disposed of by a common order as in both the appeals identical question of facts and law was involved. Counsel for the appellant states that ITA No.594 of 2007 filed by the revenue raising the similar question of law against the same order passed in ITA No.259/Chandi/2000 for the Assessment Year 1990- 91, has been dismissed by this Court while observing as under:- “In this case, the Assessing Officer applied the GP rate of 15.47% while taking into consideration the trading accounts of the assessee in respect of the manufacturing and trading sales. On appeal, the Commissioner of Income Tax (Appeals) reduced the said GP rate from 15.47% to 12.94% while taking into consideration the goods returned by the assessee and it was observed that if the said amount is reduced then the GP rate would come to 12.94%. The said order was passed by the Commissioner of Income Tax (Appeals) while taking into consideration the material available on the record showing that the consideration of the goods returned was Rs.2,59,756/- and if the said amount is reduced, then the GP rate would definitely come to 12.94%. The said finding of fact has further been upheld by the Income Tax Appellate Tribunal while observing as under:- “17. After considering the rival submissions and the material available on record, it is noticed that similar transactions had been considered as benami sale proceeds in the case of sister concern, namely, M/s. Single & Co. by the Settlement Commission. Since the nature of transactions was identical, Ld. CIT(A) was justified in holding the deposits in the bank accounts as sale proceeds and since the GP rate of 12.94% had been applied for the regular sales, Ld. CIT(A) was justified in applying GP rate of 12.94% in respect of unrecorded sales. As regards to the working of initial investment is concerned, we do not see any infirmity in the observation of the Ld. CIT(A) that generally three weeks to one month time is required for completing circle of the sale. Therefore, he was justified in directing the Assessing Officer to take into consideration three weeks' sale proceeds for the purpose of initial investment and also to increase the same by the applying GP rate of I.T.A -3- 12.94%. Considering the totality of the facts as discussed herein above, we do not see any valid ground to interfere with the findings of the Ld. CIT(A).” In view of the aforesaid finding of fact recorded by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, we do not find any ground to interfere in the same as in our opinion no substantial question of law is involved in this appeal. Dismissed.” Since the appeal filed by the revenue against the same order of the ITAT pertaining to the Assessment Year 1990-91 has already been dismissed by this Court, therefore, the present appeal in which the similar issue is involved, is hereby dismissed on the same reasoning. (SATISH KUMAR MITTAL) JUDGE

March 11, 2008 (RAKESH KUMAR GARG) vkg JUDGE