CIT vs. AMAR UJALA PUBLICATIONS PVT LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . ITA 362/2012 . CIT ..... Appellant . Through: Mr. Sanjeev Rajpal, Advocate . versus . . . AMAR UJALA PUBLICATIONS PVT LTD ..... Respondent . Through: . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE R.V.EASWAR . . . O R D E R . 23.05.2012 . . . This appeal under Section 260A of the Income Tax Act, 1961 is directed against the order of the Income Tax Appellate Tribunal (?Tribunal?, for short) dated 18.11.2011 passed in the case of M/s. Amar Ujala Publication Ltd. for the assessment year 2005-06. . The assessee is a company engaged in the publication of newspaper Amar Ujala at various places including Agra. The publication units are situated at several places in U.P. In respect of the assessment year under appeal, the assessee declared gross profit rate at 20.62% and net profit rate of 2.80% from the business of publishing the newspaper. The Assessing Officer compared the total receipts, gross profit rate and net profit rate for the assessment year under appeal with the corresponding figures for the earlier two assessment years and concluded that there was a decline in the net profit rate which called for further probe. Thereafter the Assessing Officer took up sales returns for examination and found that unit-wise, the sales returns of newspapers were as follows: . . . ITA 362/2012 Page 1 of 3 . . . Branch . Amount of sales . Sale Return (S.R.) . age . (S.R./Sales x100) . Agra . 104327125/- . 3119754/- . 2.99% . Meerut . 87862208/- . 3325605/- . 3.78% . Bareilly . 75951264/- . 2446986/- . 3.22% . Jhansi . 12600740/- . 427129/- . 3.39% . Allahabad . 43914760/- . 2844723/- . 6.48% . Varanasi . 49331790/- . 3603080/- . 7.30% . Muradabad . 40469932/- . 1223873/- . 3.02% . Noida . 80969490/- . 5039219/- . 6.22% . Kanpur . 59964823/- . 1406659/- . 2.34% . Dehradun . 67869022/- . 3302809/- . 4.87% . Panchkula/ Chandigarh . 57282358/- . 1909256/- . 3.33% . Jalandhar . 44818160/- . 5010811/- . 11.18% . Haldwani/Nanital . 41048389/- . 1131280/- . 2.75% . . . On noticing that the sales return percentage varied between 2.34% and 11.18%, the Assessing Officer held that this was on the higher side. He also noted that for the earlier assessment year 2003-04, the sales return of 4% was held to be reasonable. He accordingly adopted the sales returns of 4.5% giving some allowance for the improved sales for the year under appeal and calculated the disallowance at Rs.60,32,938/-. . In appeal, the CIT(A) examined the matter in great detail including the entire accounting process involved right from the issue of newspapers to the agents till they were returned at the gate of the publishing unit and incorporated in the accounts with appropriate figures and held that there was no case made out by the Assessing Officer for making the addition. This order of CIT(A) has been confirmed by the Tribunal in the impugned order. . . . . . . . ITA 362/2012 Page 2 of 3 . . . We find that the entire issue is essentially one of fact, where the accounting procedure relating to the sales returns and what would be the appropriate percentage of sales returns that can be allowed has been discussed threadbare by the CIT(A) whose order has been confirmed by the Tribunal. A similar, addition has been deleted by the Tribunal in respect of the assessment year 2003-04 and it is stated that no appeal has been filed by the revenue against the said order. The issue being a question of fact, we do not think any substantial question of law arises for consideration. The appeal is dismissed without there being any order as to costs. . . . . . R.V.EASWAR, J . . . . . . . SANJIV KHANNA, J . . . . . MAY23, 2012 . rd . . . . . . . . . . . ITA 362/2012 Page 3 of 3 . . . . . . . $ 20 .