C.I.T.BIKANER vs. JAIMAL RAM KASTURI and PARTNERS

vs.

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T vs.

Date of Judgment : 15.01.2013 PRESENT HON'BLE MR. JUSTICE DINESH MAHESHWARI HON'BLE MR. JUSTICE ARUN BHANSALI Mr. K.K. Bissa, for the appellant. BY THE COURT (PER HON'BLE BHANSALI, J.): The Revenue has preferred this appeal under Section 260-A of the Income Tax Act, 1961 ('the Act') against the judgment and order dated 03.06.2005 passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('the Tribunal') in ITA No.161/JDPR/1998 and CO No.49/05 for the assessment year 1993-1994, whereby the Tribunal has dismissed the appeal of the Revenue and has allowed the cross-objection of the assessee; and in the result, has deleted in toto the impugned addition towards country liquor business of the assessee, as made by the Assessing Officer ('the AO') in the assessment order dated 15.03.1996, and as partly retained by the Commissioner of Income Tax (Appeals), Jodhpur ('the CIT(A)') in the order dated 28.01.1998 as passed in the assessee's appeal.

vs.

The appeal has been admitted on the following questions of law:- “(1) Whether Tribunal was justified in holding that best judgment assessment made by the Assessing Officer is not based on cogent and relevant criteria? (2) Whether Tribunal was justified in upholding the order passed by CIT (Appeals) when it held that Assessing Officer was not justified in applying the criteria of comparable cases and taking into account the past history of the assessee himself?” The facts relevant for determination of the questions involved in this appeal are that the assessee is engaged in liquor business and during the period relevant to assessment year 1993-1994, the profit of the assessee from country liquor business was assessed at Rs.82,17,507/- as against the declared profit of Rs.68,77,277/- by adopting a net profit rate of 11.50% towards the total outgoings (total payment made to Government for lifting goods) as against the declared rate of 8.50% after rejecting the books of accounts of the assessee, under Section 145 of the Act. The profit rate was adopted by the AO by taking into account the past history of the assessee and comparable case of one M/s. Ramsaran Trilok Singh & Party, Anoopgarh. addition made by the AO to Rs.6,40,230/-. Aggrieved by the aforesaid order dated 28.01.1998, the Revenue preferred an appeal before the Tribunal and the assessee took cross-objections therein. By the impugned order dated 03.06.2005, the Tribunal has allowed the cross-objections taken by the assessee and has dismissed the appeal preferred by the Revenue; and, in the result, has deleted the additions altogether while observing and holding as under :- “21. Our reasonings with regard to the method of estimation adopted in the order for A.Y. 1991-92 as above, would apply, mutatis mutandis the year also. The slight fall in the N.P. Rate on both methods i.e. on sales and the outgoings stand explained by the fact that the assessee had to pay heavier shortfall amounts in the year as compared to the last year and that there was steep rise in the turnover. Consequently, the results declared by the assessee have to be accepted. There is no reasonable basis for adhoc sustenance by Ld. CIT(A). The Ground No.(1) of Department's appeal is dismissed and Ground No.(1) of CO is allowed.” This court while considering the appeal filed by the Revenue for the assessment year 1991-1992 being D.B. Income Tax Appeal No.145/2006 (Commissioner of Income Tax, Bikaner Vs. M/s. Jaimal Ram Kasturi and Partners) held as under:- “In our view, ultimately, the matter had been of putting assessee's past history was available and there was no material difference in the facts pertaining to the relevant assessment year and the past history year. The CIT(A), even while accepting past history as the relevant basis for assessment, proceeded to retain a part of the addition to the tune of Rs.10,65,928/- without cogent and sufficient reason therefor. The Tribunal, therefore, while endorsing the basis adopted by the CIT(A), has found no reason to sustain any addition and hence, deleted the addition altogether. In the totality of circumstances, the Tribunal cannot be faulted in accepting the profit rate as declared by the assessee while not approving the rate as applied by the AO. The order as passed by the Tribunal does not appear suffering from any perversity or from the application of any wrong principle so as to call for interference.

Accordingly and in view of the above, the answer to the questions formulated in the present case is in the affirmative i.e. against the revenue and in favour of the assessee. Consequently, the appeal fails and is hereby dismissed. No costs. ”

The reasons forgoing, on all the relevant and material aspects, equally apply to the present appeal too, which is based on self same grounds. Thus, following the decision aforesaid and in the same terms, this appeal also stands dismissed. No costs. (ARUN BHANSALI)J. (DINESH MAHESHWARI)J. RM/