The Commissioner of Income Tax-III vs. Ms/.REgency Ceramics Ltd

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 273 / 2010 C I T Jaipur ----Appellant Versus Shiv Bihari Sharma ----Respondent Connected With D.B. Cross Objection Civil No. 254 / 2011 C I T Jaipur ----Petitioner Versus Shiv Bihari Sharma ----Respondent _____________________________________________________ For Appellant(s) : Mr. K.D. Mathur for Mr. R.B. Mathur For Respondent(s) : Mr. P.K. Kasliwal _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE DR. JUSTICE VIRENDRA KUMAR MATHUR Order 29/05/2017 1. In this appeal cross objection has also been filed and since issue involved is identical therefore they are decided by this common judgment. 2. By way of this appeal, the appellant has assailed the judgment and order of the Tribunal whereby Tribunal has dismissed the appeal of the department and cross objection of the assessee was also dismissed. 2. This court while admitting the appeal framed following

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substantial question of law:- “Whether on the facts and in circumstances of the law the ITAT was justified in making estimation over estimation without assigning any specific reasons in spite of the fact that purchases of Rs.17747198/- were found unverifiable.” 3. Taking into consideration the AO has taken average of 4 years which is reproduced as under:- “The Turnover, gross profit and gross profit rate declared by the assessee during the year under consideration and earlier 3 years are as under:- A.Y. Sales Gross profit Gross profit rate 2003-04 93,38,797 23,34,741 25% 2004-05 1,50,22,453 36,13,249 24% 2005-06 2,19,86,945 50,75,146 23.09% 2006-07 2,89,25,765 66,43,183 22.97% Regarding the trading results the assessee contended that its G.P. rate is marginally low by 0.12% because of increase in sales by 31.56%. The assessee vide order sheet entry dated 22.08.2008 has admitted he not maintained any opening or closing stock inventory. He also not maintained any quantitative details or stock register etc. in the sale vouchers also the assessee not mentioned the details of goods sold and has simply mentioned ‘Textiles’. Also the quantity and rate of goods sold not mentioned in the sale vouchers. Keeping in view of these facts, provision of section 145(3) are clearly applicable in this case. It is worthwhile to mention here that in the assessment order for the assessment year 2005- 06, after discussing the facts of the case in detail, provisions of section 145(3) were invoked and g.p. rate of 32% was applied as against g.p. rate of 22.97% declared by the assessee.” 4. In view of the above, the average comes to approximately

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24% which is accepted by the tribunal. 5. In our considered opinion, the same is just and proper. 6. Thus, the issue is answered in favour of the assessee and against the department. 6.1 The appeal stands dismissed. 7. In view of dismissal of appeal cross objection of the assessee also stand dismissed. (VIRENDRA KUMAR MATHUR),J. (K.S. JHAVERI),J. Brijesh 81 & 82.