TMI Blog2016 (11) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... loss. Once the Assessing Officer rejects the books of account, applies a particular gross profit rate or/net profit rate, the returned loss goes out of picture, rather it is effaced with what has been applied by the Assessing Officer. Had there been a plausibly reasonable basis of suffering of a genuine loss, possibly the claim of the assessee could have been well justified and reasoned, but in a case like this when admittedly the books of account have been rejected by all the three authorities and even this court found that the learned counsel at the time of arguing the appeal in the first round of litigation in the case of CIT v. Ram Singh (2014 (3) TMI 849 - RAJASTHAN HIGH COURT ), admitted about application of provisions of section 145(3) of the Act, claiming that the loss is required to be allowed, in our view is not proper. To reiterate a point which was already considered by this court about rejecting the books of account under section 145(3) of the Act, is not proper and still learned counsel for the appellants insisted that this court in Ram Singh's case (supra) did not consider this issue. Argument of the learned counsel for the assessee that loss is required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,20,00,000 made without any basis of computation as also without establishing nexus thereof with the available facts and circumstances is permissible in law ? The other two appeals are at the stage of admission and since common controversy is involved in all the three appeals, with the consent of the par ties, all the three appeals are being decided at this stage by this common order. This is second round of litigation. 3. Though we will be considering the facts from DBITA 210 of 2015, however, we give herein a comparative chart of the trading account in all the three appeals after examining the record of the appeals : D.B ITA Sales declared by the assessee Estimated sales by the AO Return of Income assessed by the AO Income by the CIT(A) Income by 210/2015 116,24,42,199 127,69,28,314 2,92,30,610 (Loss), remanded by High Court to ITAT (22.1.2014). ITAT estimated total sales at 120,00,00,000 trading addition @ 1 per cent. = 1,20,00,000 8,52,55,512 5,52,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t were not required to be invoked. It has further been contended that even if the books of account are rejected under section 145(3) of the Act, it does not result into automatic addition. It has further been contended that some basis ought to have been taken into consideration by the Tribunal while applying of a particular rate or making of an addition. It has been vehemently contended that the assessee had declared a loss of ₹ 2,92,30,610 and at least the same ought to have been allowed when the loss had been proved and was in accordance with law. 6. Per contra, learned counsel for the Revenue contended that the order of the Tribunal is just and proper and the Tribunal has taken into consideration several other cases while applying a particular rate. He further contended that rather the Revenue is aggrieved inasmuch as only a net profit of only 1 per cent. has been applied and even the turnover has been reduced, which was estimated on a reasonable basis by the Assessing Officer. He further contended that the Tribunal has taken into consideration another connected case of the group of the assessee itself in the case of Asst. CIT v. Rajaram Manoharlal and Party (Kishangarh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while deciding the appeals in bunch of cases, namely Chaturbhuj Manoj Kumar v. CIT DBITA No. 684 of 2008 (reported in [2016] 388 ITR 194 (Raj)), vide order of even date, has noticed that the Tribunal in that case had taken into consideration 13 other appeals of identical liquor traders, and the reasoning of the Tribunal has been upheld by this court. We have also considered all these issues as raised by the learned counsel for the appellants in the bunch of cases decided in the case of Chaturbhuj Manoj Kumar v. CIT (supra) by order of even date and for the reasons assigned therein which we adopt in this order as well, we find no illegality or perversity in the impugned order. The learned counsel for the appellants has not been able to justify how even 1 per cent. net profit is excessive or unreasonable. 11. We may also notice that the argument of the learned counsel for the assessee that loss is required to be set off, has no legs to stand, as even otherwise the justification for loss has not been proved by the assessee either before the lower authorities or before this court as to how the assessee would have suffered a loss on a declared turnover of about ₹ 116 crore, par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of ₹ 2,32,516 shown by the assessee on a turnover of almost ₹ 4.36 crore. We also adopt the same reasoning as in the other appeals referred to hereinbefore of Chaturbhuj Manoj Kumar (supra). 13.1 In the connected case, which is a sister concern of the same party, i.e., DBITA No. 175 of 2014, also on a turnover of almost ₹ 4. 01 crore, a meager income of ₹ 2,04,390 which had no apparent basis, has been shown and since the books of account were rejected, the Assessing Officer after taking into consideration identical cases of liquor traders decided by the Tribunal applied net profit rate. The Tribunal, after remand by this court, has gone into the issue elaborately and has taken into consideration various factors, namely :- (a) State Government policy for a particular area in a particular year may influence the results. (b) Geographical conditions. (c) Socio-economic conditions. (d) Population mix of a particular area i.e. urban as well as rural. (e) Arrangements amongst various wine contractors. (f) Experience and availability of funds with the AOP members. (g) Political conditions, natural prosperity or calamity. (h) Touris ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
