(Per : HONOURABLE MR.JUSTICE V. M. SAHAI) We have heard Mr. M.R. Bhatt, learned senior counsel for the Revenue, in this Tax Appeal. The Revenue proposed the following question:
"(1).
Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance of interest expenses of Rs.6,22,957/- made on account of Sales?
(2).
Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs.10 lakhs made on account of estimation of GP after rejecting the book result?"
2. The Assessing Officer had disallowed the interest claimed by the assessee and has made addition of Rs.10 lakhs on the ground that gross profit has been shown less in the year in question than the previous year. The CIT(A) has allowed the appeal of the assessee, which has been affirmed by the Income Tax Appellate Tribunal. The Tribunal has recorded the finding on the proposed question No.1 in paragraph no.7. So far as the second proposed question is concerned, the Tribunal has recorded the finding as under:-
"7.
After hearing the rival contentions and going through the facts and circumstances of the case, we find first of all that during the year under consideration GP was at 9.03 on total combine turnover of Rs.13,49,29,213/- as against the GP of 13.32 on combined turnover of Rs.11,23,53,802/- for the immediate preceding year and there is fall in GP by 3.79, But we find that the net profit ratio is much better in the year under consideration at 3.49 as against 2.57 in the immediate preceding year at 1.521 in one year to the preceding year. The assessee's contention was that the fall in GP was mainly attributed to the comparative increase in the cost of production of job work as well as production, whereas there is no increase in comparative job charges/sales price. He stated that to prove this point, the assessee has filed complete details before AO i.e. the complete books of account, stock register, stock statement, bills and vouchers and other details. We find that AO could not point out any defect in the books of account and without pointing out any defect in the books of account rejected the book results. But in no way, we are of the view that once the assessee is able to prove increase in cost of production and comparatively there is no increase in sales price/job charges received, there is no question of making any estimate without pointing out any specific defect. Accordingly, we are of the view that CIT(A) has rightly deleted the addition and we confirm this addition. This issue of Revenue's appeal is dismissed."
3. We are in agreement with the view taken by the Income Tax Appellate Tribunal and we are of the considered opinion that this Tax Appeal is concluded on finding of fact. No substantial question of law arises for consideration of this Court. This Tax Appeal is accordingly dismissed.
(V.M.
SAHAI, J.) (N.V.
ANJARIA, J.) (SN DEVU PPS) Top