Gujarat High Court Case Information System
Print
TAXAP/452/2009 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 452 of 2009
with
TAX
APPEAL No.453 of 2009
=========================================
THE
COMMISSIONER OF INCOME TAX-1 - Appellant(s)
Versus
JYOTI
POLY VINYL LTD. - Opponent(s)
=========================================
Appearance :
MR
MR BHATT, SR. COUNSEL with MRS MAUNA M BHATT
for Appellant(s) : 1,
None
for Opponent(s) : 1,
=========================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 09/03/2010
ORAL
ORDER
(Per
: HONOURABLE MS.JUSTICE H.N.DEVANI)
In
these appeals under section 260A of the Income Tax Act, 1961 (the
Act), appellant revenue has proposed the following question stated
to be a substantial question of law arising arising out of the
impugned order dated 2nd May 2008 made by the Income Tax
Appellate Tribunal (the Tribunal):
Whether,
on the facts and in the circumstances of the case, the Appellate
Tribunal was right in law in holding that no ground against the
decision of the learned CIT (A) was taken on rejecting the order of
the Assessing Officer for rejection of books of account of the
assessee u/s 145 of the Act thereby confirming action of the CIT (A)
in deleting the addition on account of estimation of G.P.?
The
assessment years are 1997-98 and 1998-99 and the relevant accounting
periods are the year ended on 31st March 1997 and 31st
March 1998 respectively.
The
facts stated briefly are that the Assessing Officer framed
assessments under section 143(3) of the Act rejecting the books of
account of the assessee and making an addition in the gross profit
of the assessee. The assessee carried the matter in appeal before
Commissioner (Appeals) who allowed the appeal holding that the
Assessing Officer was not justified in rejecting the books of
account. The addition made in the gross profit was also deleted.
The Revenue carried the matter in appeal before the Tribunal in
relation to both the assessment years. The Tribunal vide the
impugned order dated 2nd May 2008 dismissed both the
appeals.
Mr.M.R.Bhatt,
learned Senior Counsel for the appellant revenue submitted that the
decision of Commissioner (Appeals) against rejection of books of
account as well as deletion of the gross profit addition had been
challenged, however, the Tribunal had taken a narrow view that in
the grounds of appeal, the rejection of books of account under
section 145 had not been mentioned. It was submitted that the
ground pertaining to deletion of addition made in the gross profit
would include the ground against rejection of books of account under
section 145 of the Act. Hence, the Tribunal was not justified in
holding that no ground had been taken against the decision of
Commissioner (Appeals) as regards rejection of books of account
under section 145 of the Act.
The
Tribunal in its impugned order has recorded thus:
We
have carefully considered the rival submissions and the material on
record along with the order of the tax authorities. We find that the
Assessing Officer has rejected the books of accounts and estimated
the gross profit of the assessee. The assessee went in appeal before
the CIT(A) challenging the action of the Assessing Officer of
rejecting the books of accounts and also estimation of gross profit.
The CIT (A) found the action of the Assessing Officer about rejection
of the books of accounts to be unjustified and directed the Assessing
Officer not to reject the books of accounts u/s 145 of the Act. Even
he held that it is not open to the Assessing Officer to make estimate
without the basis when the books of accounts represent correct and
true picture. The Revenue has although challenged the deletion of
the addition on account of fall in the gross profit but did not take
any ground against the direction of the CIT (A) not to reject the
books of accounts u/s 145. In view of these facts, we do not find
any illegality or infirmity in the order of the CIT (A) as in the
absence of rejection of books of accounts, the Assessing Officer, in
our opinion, cannot make any addition in the gross profit shown by
the assessee.
From
the facts recorded by the Tribunal, it is apparent that no ground
challenging the order of Commissioner (Appeals) holding that the
rejection of the books of account was unjustified, has been taken in
the memo of appeal, nor is any contention in respect of the same
advanced during the course of hearing of the appeal. In the
circumstances, no infirmity can be found in the impugned order of
the Tribunal in holding that when no ground was taken against the
directions of Commissioner (Appeals) not to reject the books of
account under section 145 of the Act, it would not be open to the
Assessing Officer to make any addition in the gross profit shown by
the assessee. In absence of rejection of books of account, the
entries made in the books of accounts are deemed to represent the
correct and true picture, hence, there would be no basis for
estimating the gross profit. Without rejection of books of account,
no addition could have been made on account of fall in gross profit.
In
the aforesaid facts and circumstances, no infirmity can be found in
the impugned order of the Tribunal so as to warrant interference.
In absence of any question of law, as proposed or otherwise, much
less any substantial question of law arising out of the impugned
order of the Tribunal, the appeals are dismissed with no order as
to costs.
[D.A.MEHTA,
J.]
[HARSHA
DEVANI, J.]
parmar*
Top