TMI Blog2022 (6) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... llant / assessee filed the auditor's report, as per which, there was no adverse comment on books of accounts maintained by the appellant / assessee and the purchases debited into P L account, which fact was not disputed by the assessing officer. In such circumstances, the CIT(A), taking note of the fact that there was a decline in gross profit declared by the assessee for the assessment year in question compared to earlier financial year, directed the assessing officer to restrict the disallowance on purchases to the extent of 2.5% of the total turnover. The said finding of the CIT(A) was also affirmed by the Tribunal, based on the evidence adduced before the same. Such well considered findings of the appellate authorities do not warran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n response to the same, they furnished certain documents, however, were unable to produce the purchase details, since the relevant records for the assessment year 2014-15 were destroyed during 2015 Chennai flood. Therefore, the assessing officer passed the assessment order dated 30.11.2016, thereby estimating disallowance at 10% on total purchases on adhoc basis and added a sum of Rs.3,55,57,472/- to the total income of the assessee. 3.Aggrieved over the assessment order passed by the respondent/Assessing Officer, the appellant/assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who, vide order dated 15.07.2019, sustained addition of Rs.1,32,85,764/- under the purchase account, after adopting the gross profit ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y setting aside the orders passed by the authorities below. 5.Mr.T.Ravikumar, learned Senior Standing Counsel appearing for the respondent submitted that when there was no supporting evidence, the CIT(A) ought not to have restricted the adhoc disallowance determined by the respondent / assessing officer to 2.5% of the total turnover and sustained the disallowance of Rs.1,32,85,764/- and deleted the balance addition of Rs.2,22,71,708/-. Stating so, the respondent preferred appeal, which was dismissed by the Tribunal, by the order impugned herein. The learned counsel further submitted that the Tribunal being a fact finding authority, has to decide the issue, only after a careful examination of evidence and material produced before it, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial results and the low gross and net profit, I estimate the gross profit at 25.77% as in last year against 23.27% shown in this year. The fall in gross profit rate works out to 2.50%. Adopting this rate on the sales turnover of Rs.53,14,30,550/-, the addition to the gross profit works out to Rs.1,32,85,764/-. I therefore sustain an addition of Rs.1,32,85,764/- made by the assessing officer under purchases account and delete the balance estimated disallowance of Rs.2,22,71,708/- and allow the grounds partly. Income Tax Appellate Tribunal: 7....Facts borne out from records clearly indicate that the assessee could not substantiate purchases debited into P L account with necessary supporting bills and vouchers. It is also an admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of estimation of gross profit. Therefore, we are of the considered view that there is no error in the reasons given by the Ld. CIT(A) to sustain additions made by the AO towards disallowance on purchases on the basis of fall in gross profit rate declared by the assessee on total turnover. Hence, we are inclined to uphold the findings of the Ld. CIT(A) and reject the appeal filed by the assessee as well as the Revenue . 9.Thus, it is evident from the aforesaid findings of the appellate authorities that the appellant / assessee did not furnish the relevant materials to substantiate their claim before the authorities below and they themselves admitted that they were unable to produce the supporting evidence for purchases, since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law. In this context that the appellant claims and asserts that the decision of the Tribunal was perverse, and therefore substantial question of law arises from the impugned order. A finding of a Tribunal on fact does not become perverse merely because another finding or conclusion was possible. Test and benchmark of perversity is far stringent and strict. Factual findings can be only interfered with when they are patently unreasonable, not supported by any evidence or are based upon extraneous and irrelevant material. Interference may be justified when the conclusions are based upon mere conjectures and surmises or where no person acting judicially and properly instructed under the relevant law could have come to the same decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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