Rajasthan High Court - Jaipur
Vinod Kumar Pramod Kumar vs Income Tax Officer on 10 December, 1999
Equivalent citations: (2000)66TTJ(NULL)722
ORDER
B. M. Kothari, A.M. This appeal by the assessee is directed against the order dated 29-1-1993, passed by the Deputy Commissioner (Appeals) for assessment year 1991-92. The assessee has raised three grounds but all these three grounds relate to confirmation of an addition of Rs. 5,860 made in the declared gross profit. The assessee has challenged the enhancement in the turnover of Rs. 11,70,000 as against declared turnover of Rs. 11,64,425 and has also challenged the application of gross profit rate of 13.5 per cent as against declared gross profit rate of 13.1 per cent.
2. The learned counsel drew our attention to the gross profit charts submitted at page 1 of the paper book. It was also pointed out by him that the entire purchases and sales are supported by vouchers and the proper books of accounts. There is no justification for making any addition in the declared results.
2.1. The learned Departmental Representative supported the order of the Deputy Commissioner (Appeals) and relied upon the reasons mentioned in the assessment order. He pointed out that gross profit rate of 14 per cent was applied by the assessing officer in the immediately preceding year. The assessing officer has liberally applied gross profit rate of only 13.5 per cent in the year under consideration. The learned Departmental Representative strongly urged that the order of the Deputy Commissioner (Appeals) should be confirmed.
3. We have considered the submissions made by the learned representatives of both the parties and have perused the orders of the departmental authorities. The assessee declared gross profit of Rs. 1,96,636 on total turnover of Rs. 11,19,136 in the immediately preceding year viz assessment year 1990-91 as per chart submitted by the assessee, which is placed at page 1 of the paper book. Percentage of gross profit rate declared by the assessee has been mentioned as 13.12 per cent in the said chart. If the figures of gross profit and turnover mentioned in the chart are correct, the gross profit rate comes to 17.59 per cent. However, the assessment order passed by the assessing officer in the year under consideration shows that the gross profit rate of 14 per cent was applied in the preceding year. It, therefore, appears that the figure of turnover or the gross profit mentioned in the said chart placed at page 1 of paper book suffers from some mistake. The assessing officer applied gross profit rate of 14 per cent for the immediately preceding year. The Commissioner (Appeals) in the impugned order has observed that gross profit rate of 13.5 per cent applied by the assessing officer in the year under consideration, is lower as compared to the gross profit rate of 14 per cent applied in the preceding year. He, therefore, confirmed the action of the assessing officer.
3.1. A perusal of the assessment order, inter alia, reveals that the assessee produced books of accounts consisted of cash book, ledger, purchase and sale vouchers which were examined by the Income Tax Officer by applying test check thereof. The Income Tax Officer has also given a definite finding in the assessment order that purchases and sales are vouched. The only defect pointed out in the assessment order is absence of quantitative details. The assessing officer has not pointed out any specific mistake or deficiency in the books of accounts maintained and produced by the assessee. In our view the correctness of the book results cannot be challenged without pointing out any specific mistake or deficiency in the books of accounts or without giving a firm finding that the method of accounting followed by the assessee was such that profit and gains cannot properly be deduced from such books of accounts. The assessing officer is also required to give a finding that the books are incomplete or incorrect in any manner. Unless such a specific finding is given, no addition in the declared trading results can be validly made simply because the profit rate in a particular year happens to be slightly lower as compared to the profit rate in the immediately preceding year. The comparative gross profit chart placed at page 1 of paper book inter alia, shows that the gross profit rate in assessment year 1987-88 was 10.9 per cent and in assessment year 1988-89 it was 11.4 per cent gross profit rate is bound to vary from year to year which depends on various factors. The minor variation in the gross profit rate declared by the assessee in the year under consideration as compared to the preceding year by itself cannot justify any addition. On a careful consideration of the entire relevant facts we are of the view that no addition can be validly made in the declared trading results on the facts and circumstances of assessee's case. We, accordingly, direct the assessing officer to delete the said addition of Rs. 5,850.
4. In the result, the appeal is allowed.