CIT vs. ARVIND KUMAR MODII

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . ITA 49/2012 . . . CIT ..... Appellant . Through Mr. Sanjeev Rajpal, sr. standing counsel . . . versus . . . . . ARVIND KUMAR MODII ..... Respondent . Through . . . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE R.V.EASWAR . . . O R D E R . 23.01.2012 . . . The findings recorded by the tribunal are factual. Ld. counsel for the appellant-revenue submits that the GP rate for the assessment year 2005-06 was substantially lower than the earlier years and therefore rejection of books of accounts was justified. . 2. The turnover and GP rate of the assessment year in question and 2002-03 onwards are as under : . Assessment Year . Sales . Gross Margin % . 2002-03 . 3.74 Crores . 14.37% . 2003-04 . 7.12 Crores . 15.75% . 2004-05 . 7.88 Crores . 20.11% . 2005-06 . 11.56 Crores . 11.08% . . . 3. The respondent-assessee had given detailed explanation for the decline in GP rate including competition in the market, the factum that the turnover had increased substantially and that the assessee had to make re-payment to the major purchasers namely Sarita Handa Exports and Sarita Handa Exports Pvt. Ltd. on account of change in excise duty. The repayment question has been specifically examined and the explanation of the assessee accepted. It is not the case of the Revenue that there is any material to show that re-payment was not made or it is a fictitious/ wrong entry. Thus the factual details have been considered, elucidated and decided in the order of the tribunal. . 4. The Assessing Officer had recorded that the assessee had charged lesser price on certain items sold to Sarita Handa group with reference to two varieties of fabrics. The respondent-assessee had sold fabric to them at the rate of Rs.115 and 105 per sq.mtr, whereas fabric was sold to third parties at Rs.120 and 115 sq.mtr. Explanation given by the assessee was that Sarita Handa group were major and bulk purchasers and the quantity of the fabric sold to third parties were minimal, compared to the quantities sold to them. . 5. In view of the aforesaid factual position, explanation given and accepted, we do not find any substantial question of law arises on the first issue. The findings are factual and cannot be treated as perverse. . 6. Addition of Rs.7,47,345/- was made by disallowing commission payment. The CIT(Appeals) and the tribunal have recorded the finding that the Assessing Officer had asked the respondent assessee to produce the parties only on 28th December, 2007 and the assessment order was passed on 30th December, 2007. The CIT(Appeals) and the ITAT have also recorded a finding that the authorized representative of three out of five parties to whom commission was paid had appeared before the Assessing Officer but the Assessing Officer did not take papers on record and insisted that the parties should appear in person. Summons were issued to the said parties to appear in person or through authorized representative. The respondent assessee had furnished full details, PAN number, vouchers, invoice number etc. and payments were made by cross cheque. On second question also we do not find any substantial question of law arises. The findings are findings of facts. . Accordingly, the appeal is dismissed. No costs. . . . . . SANJIV KHANNA, J . . . . . . . R.V.EASWAR, J . JANUARY 23, 2012 . vld . . . . . . . $ 9 to 12 .