1997 PLP (Trib (PTD)

9. In the above circumstances, we reject the pleas of the department that CIT (A) was not justified either to reduce the sales or to reduce the G.P. rate. On the contrary, the prayer made by the assessee on the point of sales has been favourably considered by us and adequate relief has been allowed to the assessee, as observed above.

10. So far as the order of the first appellate authority on the point of add-backs is concerned. We find that the same is also in order as partial relief has already been allowed to the assesee under some heads such as "staff salary" and "freight" etc., whereas the remaining add backs have been found proper and confirmed. In these circumstances, we feel that there is no occasion for us to interfere in this order end thus the prayers made by both the parties for modifying the order of the first appellate authority on this issue are hereby declined.

11. No other point is at issue in this appeal requiring our determination.

12. On account of what has been said above, the appeal filed by the department in regard to the Assessment Year 1990-91 is dismissed whereas the appeal filed by the assessee partially succeeds in the manner and to the extent, as indicated above. Assessment Year 1991-92 11-A. In this year, the declared trading version of the assessee has been rejected as a consequence of which, the returned sales at Rs.1,53,97,334 and G.P. rate of 21 % were discarded and sales have been estimated at Rs. 1,85,00,000 and G.P. rate has been applied at 23.11 % . Some add backs were also made out of P&L Account. 12-A. In the first appeal, keeping in view the various defects of accounts as demarcated in the assessment order and also as per history of the case, the rejection of declared version has been upheld by the first appellate authority for this year as well. However, for the reason that the assessee had made addition in plant and machinery the estimate of sales made at Rs.1,85,00,000 was found on the higher side and the first appellate authority has reduced the same to Rs.1,80,00,

000. The applied G.P. rate of 23.11 % was also found excessive and the CIT(A) has also reduced the same to 22.50%. We find that this decision of the CIT(A) on both the said counts is quite in line with the previous history of the case and as such does not call for any interference at our stage.

13. Besides the above, the indulgence which has been shown to the assessee by the first appellate authority by reducing the addition of Rs.75,000 to Rs.50,000 under the head "salaries" and the addition of Rs.75,000 to Rs.50,000 under the head "freight"' respectively is quite judicious and the learned D.R. has not been able to pin point any lacuna in it. The relief, which has been allowed to assessee as such also appears to be fair and reasonable and the same is accordingly confirmed.

14. No other point is involved in this departmental appeal for our consideration.

15. As a result thereof, the departmental appeal for the Assessment Year 1991-92 is hereby dismissed. Assessment Years 1992-93, 1993-94 and 1994-95.

16. As pointed out above, the first appeals filed by the assessee in respect of these three assessment years were decided by the then CIT(A) through a joint order dated 14-5-1996. As such we are also deciding these appeals through a consolidated order.

17. The position of declared and assessed trading results for these three years is as under:

1992-93 1993-94 1994-95 Sales declared Rs.1,36,75,929 Rs.1,30,01,092 Rs.1,33,87,905 G. P. declared 19.28 % 20.07 % 18.90 % Sales estimated. Rs.1,70,00,000 Rs.1,70,00,000 Rs.1,75,00,000 G.P. applied 23.11 % 23.11 % 23.11

18. In these appeals, the assessee has contested the rejection of declared version, estimate of sales made and G.P. rate applied as unjust and excessive. Various add-backs made out of expenses claimed in P&L account have also been contested as arbitrary and excessive. It may be pointed out here that the assessee had declared loss of Rs.10,26,646, Rs.9,47,148 and Rs.8,58,650 for the assessment years under review.

19. As in the previous years, the assessee's cash sales and cost of sales were not fully open to verification. Similarly purchases of raw materials were found mostly made through cash and as such were not appropriately vouched. The disclosed G.P. rate was also found to be on the lower side. The assessee did not maintain any day to day production record. No stock register was maintained, in the absence of which inflow/outflow of the goods also remained unverifiable. The assessee has also got a consistent history of rejection of books of accounts.

20. Be that as it may, after giving a careful consideration to the facts of the case and also keeping in view the past history of the assessee, particularly, in the Assessment Years 1990-91 and 1991-92, the CIT(A) came to the conclusion that the estimate of sales in the three years under consideration were excessive and thus the same were reduced to Rs.1,37,00,000 for the assessment year 1992-93, Rs.1,40,00,000 for the assessment year 1993-94 and Rs. 1,42,00,000 for the assessment year 1994-95 respectively. Learned CIT(A) has also found the applied G.P rate at 23.11 % in all the three years as excessive and thus keeping in view the past history of the case has directed that the same be applied at 22.50% in each year. The first appellate authority has also allowed relief to the assessee in the add-backs made under the heads "freight" and" octroi" "staff salary" and "advertisement" and the disallowances were appropriately reduced by him. However, the rest of the add-backs made were found in order and the same were accordingly confirmed by the CIT(A) in all the three years under reference.

21. According to the learned A.R. of the assessee, the relief allowed to the assessee by the first appellate authority was not adequate. We, however, find that this position is not correct. A careful scrutiny of the order made by the first appellate authority would reveal that even handed justice has been done by the first appellate authority, keeping in view the quantum of sales fixed in the previous years and the G.P. rate declared to be applied. The declared version of the assessee was rightly discarded for the reasons stated in the orders of the departmental officers and the assessee had failed to assign any good cause for the decline in the turnover in these three years -as compared to the previous years, for instance assessment years 1988-89, 1989-90, 1990-91 and 1991-92. Regarding the G.P. rate, it may be stated here that in the assessment year 1989-90, the same was applied at 22.5 % by the first appellate authority and the assessee did not file any second appeal in that respect. Similarly, the assessee has not filed any appeal against the order of CIT (A) in regard to the assessment year 1991-92 in which the G.P. rate was determined at 22.5 % also. In these circumstances, the assessee would be deemed to have accepted the G.P rate of 22.5% being the history of this case. It would also be worth mentioning that while disposing of the cross appeals in regard to the assessment year 1990-91, as above, we have also maintained the order of the first appellate authority applying the G.P. rate al 22.50% . We are, therefore, of the considered view that the order dated 14-5-1992 passed by the then CIT (A) covering the three years under review and reducing the applied G.P. rate at 23.11 % in each year to Rs. 22.50% is correct and also fully in line with the past history of the assessee. So far as the grievance of the assessee pertaining to add-backs is concerned, adequate relief has already been allowed to the assessee by the first appellate authority under the various heads as discussed in the order of the first appellate authority whereas the remaining add-backs have been kept intact. We have considered the submissions made by the learned A.R' of the assessee on this issue item wise and have reached the conclusion that the order passed by the CIT(A) does not admit of any interference, being fair and reasonable.

22. On account of what has been observed above, we find that the relief, which has already been allowed to the assessee in the three years under review is quite appropriate and as such further indulgence cannot be shown to the assessee on any of the issues raised in these appeals on behalf of the assessee. The order of the CIT(A) is, therefore, confirmed.

23. As a sequel to the above, the three second appeals filed by the assessee pertaining to the Assessment Years 1992-93 1993-94 and 1994-95 deserve to be dismissed and we order accordingly.

24. In view of the above, all the six titled appeals stand decided in the above terms. C.M.S./337/Trib Order accordingly.