IN THE HIGH COURT OF KERALA AT ERNAKULAM
ITA.No. 693 of 2009()
1. THE COMMISSIONER OF INCOME TAX,KOTTAYAM.
... Petitioner
Vs
1. M/S.AISWARYA TRADING CO.,KUTTANAD,
... Respondent
For Petitioner :SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)
For Respondent :SRI.A.KUMAR
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice P.S.GOPINATHAN
Dated :24/03/2010
O R D E R
C.N.Ramachandran Nair & P.S.Gopinathan, JJ.
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I.T.A.693 of 2009
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Dated this the 24th day of March, 2010.
JUDGMENT
Ramachandran Nair, J.
1.Heard standing counsel for the Revenue, which
filed the appeal and Adv.Sri.A.Kumar appearing
for the respondent assessee.
2.The question raised is whether the Tribunal was
justified in changing the pattern of addition
from Rs.10 fixed by the officer per litre of
arrack sold and confirmed by the C.I.T (Appeals)
to a lumpsum addition of Rs.1,00,000/-. Even
though the Tribunal is free to fix the income on
a rational basis, if accounts are not acceptable,
we feel that the facts in this case are peculiar
because, the assessee conceded net income at Rs.6
per litre from arrack business. However, the
ITA 693/09 -:2:-
assessing officer rejected the offer and fixed
the net income at Rs.10. Even though the income
fixed got confirmed in first appeal, the Tribunal
reversed the same. The Tribunal, however, has
not stated the basis on which it estimated the
addition at Rs.1,00,000/-. In fact, the Tribunal
itself has stated that, for the preceding year
the income fixed by the Tribunal was at Rs.10 per
litre. Counsel appearing for the assessee
contended that profit vary from year to year and
therefore the same rate of profit may not be
obtained in succeeding years. In any case, we
notice that the assessee itself has offered for
assessment net income at Rs.6 per litre of arrack
sold. However, since the assessee is dragged at
three levels of appeals, we feel that the
assessee is entitled to some relaxation even from
what they have offered. We, therefore, allow the
appeal in part by reversing the order of the
ITA 693/09 -:3:-
Tribunal and by directing the assessing officer
to estimate net income at Rs.5 per litre of
arrack sold and demand tax from all the parties,
in accordance with law.
C.N.Ramachandran Nair, Judge.
sl. P.S.Gopinathan, Judge.