TMI Blog2015 (5) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, in the judgment of the apex court in Melton India's case (1997 (1) TMI 471 - SUPREME COURT OF INDIA ), it was held that consumption of electricity can be one of the factors for drawing an inference that the assessee's intention to avoid tax was there. However, in the light of the findings noticed hereinabove, the addition on the basis of the gross profit rate of 23 per cent. on the total turnover of ₹ 93,26,096 in the facts and circumstances of the present case could not be faulted. No substantial question of law arises - Decided against revenue. - ITA No. 93 of 2014 (O&M) - - - Dated:- 11-8-2014 - MR. AJAY KUMAR MITTAL AND MR. FATEH DEEP SINGH, JJ. For the Appellant : Ms. Savita Saxena, Advocate JUDGMENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch increased consumption of electricity is attributed would have been existing at the time when meter reading was taken by the Assessing Officer and also without appreciating the fact that the Assessing Officer had allowed deduction of 30 per cent. in consumption of electricity while computing the addition on account of unrecorded production of the assessee ? (iii) Whether, in the facts and in the circumstances of the case, the order of the Income-tax Appellate Tribunal is not perverse inasmuch as it has applied or approved different rates of gross profit in four dif ferent cases of similar nature, vide its orders dated August 20, 2013 (in three cases) and May 24, 2013 (in one case) without pointing out the specific reason for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer to apply the gross profit at 23 per cent. on the total turnover of ₹ 93,26,096 for the purpose of determining income from manufacturing against the gross profit shown by the assessee at 8.78 per cent. and confirmed the addition of ₹ 13,25,728. Against the order dated April 27, 2012 (annexure A-2), the assessee as well as the Revenue filed appeals before the Tribunal. The Tribunal, vide order dated August 20, 2013 (annexure A-3), upheld the order of the Commissioner of Income-tax (Appeals) and dismissed both the appeals. Hence, the present appeal by the Revenue. 3. Learned counsel for the Revenue submitted that the Assessing Officer on the basis of consumption of electricity relying upon the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific circumstances of the assessee, adopted gross profit rate of 23 per cent. and sustained the addition to that extent. 6. The Commissioner of Income-tax (Appeals), while partly accepting the plea of the assessee, had noticed as under : 4.3 Considering the totality of facts and circumstances of the case, it emerges that the material/evidence in the form of sample meter reading of one hour is irrelevant and inconclusive evidence for the purpose of determining the income from the business operations of the appellant during the year. It is because : (a) Sample is very small. (b) It is not relating to the assessment year in consideration. (c) Power consumption is only one factor of production which is subject t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 8.78 per cent. Accordingly, on turnover of ₹ 93,26,096 the gross profit at 23 per cent. will be ₹ 21,45,002, the gross profit disclosed is ₹ 8,19,274. Therefore, the addition will be ₹ 13,25,728. (g) The addition made by the Assessing Officer based on irrelevant and inconclusive evidence of meter reading as discussed above for bringing into tax the suppressed sales is faulty and inappropriate amounting to taxation of notional income. Because in all the income- tax proceedings until now there is not a single element/suggestion that the appellant has made any sales out of the books. Taking note of this fact, that it is not a case of sales outside the books together with the fact that the method applied by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Income-tax (Appeals) and the Tribunal were not shown to be erroneous or perverse in any manner by the learned counsel for the Revenue. Further, in the judgment of the apex court in Melton India's case (supra), it was held that consumption of electricity can be one of the factors for drawing an inference that the assessee's intention to avoid tax was there. However, in the light of the findings noticed hereinabove, the addition on the basis of the gross profit rate of 23 per cent. on the total turnover of ₹ 93,26,096 in the facts and circumstances of the present case could not be faulted. 9. Accordingly, no question of law much less a substantial question of law arises in this appeal. Finding no merit, the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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