TMI Blog2014 (7) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not be interfered unless the estimation is perverse and ill-logical and has no reasonable nexus with the business activity vis-a-vis the turnover of the assessee. The Tribunal is a last fact finding authority is required to give its own reason howsoever brief it may be - the reasoning given by the Tribunal though in brief was not cryptic, which could result in non-application of mind - the Tribunal applied its mind and thereafter, passed the order after considering the submissions of the parties – the Tribunal was justified in not remanding the matter - reasoning adopted by the AO was perfectly justified and in accordance with the average estimation of the gross profits after comparing it with the gross profit rates with the previ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss profit rate for the previous year was 7.95%, which was accepted by the Assessing Officer and, therefore, the gross profit rate of 9.46% shown for the year in question was correct indicating an increase in the gross profit rate roughly by 1.5%. The Assessing Officer after comparing the gross profit rates for the last 7 years from the assessment year 1980-81 onwards found that the gross profit rate for the assessment year 1982-83 was 10.38% and for the assessment year 1984-85 it was 9.98% and, therefore held that the average gross profit rate for the year in question has to be treated above 9.46%. The Assessing Officer accordingly estimated that the gross profit rate for the assessment year 1986-87 would be 10% and, consequently, added a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer was restored. The Tribunal considered the gross profit rate of the assessee for the previous years, where it had exceeded more than 10% and also considered the gross profit rates of some assessment years, which was less than 10% and after considering the submissions of the parties held that the Assessing Officer's order was liable to be upheld as it gave a better reasoning for arriving at the average gross profit rates than the reasoning given by the appellate authority. The Tribunal also found that once the account books has been rejected, which the appellate authority had also affirmed in which case, there was no reason for the appellate authority to depart with the reasoning given by the Assessing Officer if it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid, we find that the Assessing Officer has given a categorical finding with regard to absence of stock register for tobacco leafs, packing material and consumption of raw material. The Assessing Officer found that the stock register of various raw materials consumed by it for its manufacturing activity was not maintained and the books of accounts were not maintained on a day to day basis. While rejecting the books of account, the Assessing Officer assessed the turnover based on the gross profit rates indicated by the assessee in his previous assessment years and found that the gross profit rates were above 10% for the assessment year 1982-83 and 1983-84 and found that in relation to the turnover, the gross profit rates has to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the immediate previous assessment year. Consequently, the logic applied by the appellate authority for the assessment year in question was not correct, especially when the appellate authority had affirmed the rejection of the books of account. We find that the business operation of the assessee is the same for the assessment year in question as compared with the previous assessment years. Consequently, profits estimated in the previous years is a safe guide for estimation of the profits for the assessment year in question for estimating the turnover since the business activity conducted by the assessee remains the same. If we take the average, gross profit rates from assessment year 1980-81 to 1985-86, we find that the average gross pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal though in brief was not cryptic, which could result in non-application of mind. We are of the opinion that the Tribunal applied its mind and thereafter, passed the order after considering the submissions of the parties. Consequently, for the reasons stated aforesaid, we are of the opinion that the Tribunal had passed a reasoned order setting aside the order of the appellate authority and affirming the order of the Assessing Officer. We are also of the view that the Tribunal was justified in not remanding the matter, inasmuch as the reasoning adopted by the Assessing Officer was perfectly justified and in accordance with the average estimation of the gross profits after comparing it with the gross profit rates with the previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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