The DCIT, Circle-2,, RAJKOT-GUJARAT v. M/s Rajmoti Industries,, RAJKOT-GUJARAT

ITA 179/RJT/2009 | 2005-2006
Pronouncement Date: 31-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 17924914 RSA 2009
Assessee PAN AAHFS6930M
Bench Rajkot
Appeal Number ITA 179/RJT/2009
Duration Of Justice 4 year(s) 3 month(s) 17 day(s)
Appellant The DCIT, Circle-2,, RAJKOT-GUJARAT
Respondent M/s Rajmoti Industries,, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2013
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 31-07-2013
Date Of Final Hearing 14-06-2013
Next Hearing Date 14-06-2013
Assessment Year 2005-2006
Appeal Filed On 13-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI T K SHARMA JM AND SHRI D K SRIVASTAVA AM ITA NO. 179 /RJ T/20 09 ASSESSMENT YEAR : 200 5 - 0 6 DCIT CIR - 2 RAJKOT V. M/S RAJM OTI INDUSTRIES BHAVNAGAR ROAD RAJKOT PAN : AAHFS 6930 M ITA NO . 180 /RJT/20 09 ASSESSMENT YEAR : 200 5 - 06 M/S RAJM OTI INDUSTRIES BHAVNAGAR ROAD RAJKOT V. JCIT RANGE - 2 RAJKOT DATE OF HEARING : 14 .0 6 .2013 DATE OF PRONOUNCEMENT : 31 .0 7 .2013 ASSESSEE BY : SHRI D V LALC HANDANI ADVOCATE SHRI R D LALCHANDANI ADVOCATE REVENUE BY : SHRI RAJIV RANADE DR ORDER D. K. SRIVASTAVA : THIS ORDER IS BEING PASSED IN COMPLIANCE WITH THE DIRECTIONS GIVEN BY THE HONBLE J URISDICTION AL HIGH COURT IN ITS JUDGMENT DATED 30.12.2009 IN RAJ MOTI INDUSTRIES V. ACIT TAX APPEAL NO.2398 OF 2009. THE MATTER AS RESTORED BY THE HONBLE HIGH COURT WAS LISTED FOR HEARING ON MORE THAN 10 OCCASIONS SPREAD OVER 2011 2012 AND 2013 BUT HEARING HAD TO B E ADJOURNED AT THE R EQUEST OF THE ASSESSEE. FINALLY THE MATTER WAS HEARD AND THE HEARING WAS CLOSED ON 14.6.2013. 2. THE ASSESSEE IS A FIRM. IT IS ENGAGED IN THE BUSINESS OF PRODUCTION AND SALE OF EDIBLE OIL. THE ASSESSEE FILED ITS RETURN OF INCOME F OR THE ASSESSMENT YEAR UNDER APPEAL ON 31.10.2005 RETURNING TOTAL INCOME AT R S.55 97 530/ - AS AGAINST WHICH TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AT RS.4 20 69 930/ - IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME - TAX ACT ON 31.12.2007 AFTER MA KING SEVERAL ADDITIONS INCLUDING ADDITION OF RS.2 53 44 285/ - ON ACCOUNT OF ESTIMATION OF GROSS PROFIT. 3. AGGRIEVED BY THE ORDER PASSED BY THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE C OMMISSIONER OF I NCOME - TAX (A PPEALS ). B Y HIS ORDER DATED 30.01.2009 THE LD . CIT(A) PARTLY ALLOWED THE APPEAL FILED BY THE 2 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES ASSESSEE. THE LD CIT(A) GRANTED CERTAIN RELIEFS TO THE ASSESSEE AGAINST WHICH THE REVENUE FILED APPEAL BEFORE THIS TRIBUNAL. THE LD . CIT(A) DID NOT GRANT CERTAIN RELIEFS AG AINST WHICH THE ASSESSEE ALSO FILED APPEAL BEFORE THIS TRIBUNAL. 4. THE APPEAL FILED BY THE REVENUE BEFORE THIS TRIBUNAL BEING DCIT V. M/S.RAJMOTI INDUSTRIES ITA NO.179/RJT/2009 AND THE APPEAL FILED BY THE ASSESSEE BEING M/S.RAJMOTI INDUSTRIES V. JCIT ITA NO.180/RJT/2009 WERE DISPOSED OF BY THIS TRIBUNAL BY ITS COMMON ORDER DATED 16.10.2009. BY THE AFORESAID ORDER SOME ISSUES WERE DECIDED IN FAVOUR OF THE ASSESSEE WHILE REMAINING ISSUES WERE DECIDED IN FAVOUR OF THE REVENUE. ONE OF THE ISSUES WHICH WA S SUBSTANTIALLY DECIDED AGAINST THE ASSESSEE RELATED TO THE ADDITION OF RS.2 53 44 285/ - ON ACCOUNT OF ESTIMATION OF GROSS PROFIT. 5. AGGRIEVED BY THE ORDER PASSED BY THIS TRIBUNAL THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE HONBLE HIGH COURT (TAX APPEAL NO.2398 OF 2009) IN WHICH FIVE SUBSTANTIAL QUESTIONS OF LAW WERE FORMULATED FOR CONSIDERATION AND DECISION OF THE HONBLE HIGH COURT. THOSE FIVE SUBSTANTIAL QUESTIONS OF LAW ARE GIVEN IN PARAGRAPH 1 OF THE JUDGMENT DATED 30.12.2009 OF THE HONB LE HIGH COURT. PERUSAL OF THE AFORESAID QUESTION S OF LAW SHOWS THAT THEY RELATED TO REJECTION OF BOOKS OF ACCOUNTS AND ESTIMATI ON OF GROSS PROFIT BY THIS TRIBUNAL AT THE RATE OF 2% OF THE TURNOVER. IN THE LIGHT OF THE AFORESAID QUESTIONS THE HONBLE HIGH COURT REMANDED THE ISSUE OF ESTIMATION OF GROSS PROFIT TO THIS TRIBUNAL WITH THE FOLLOWING DIRECTIONS: - 12. HAVING HEARD LEARNED COUNSELS APPEARING FOR THE PARTIES AND HAVING GONE THROUGH THE IMPUGNED ORDER OF THE TRIBUNAL AS WELL AS THE ORDER OF THE A SSESSING OFFICER AND THE APPELLATE AUTHORITY IN LIGHT OF THE LAW LAID DOWN BY THIS COURT IN THE ABOVE REFERRED TWO JUDGMENTS THIS COURT IS OF THE VIEW THAT THE TRIBUNAL HAS NOT CONSIDERED NOR IT HAS DEALT WITH THE REASONING GIVEN BY THE CIT(APPEALS) WHILE GRANTING SUBSTANTIAL REDUCTION TO THE APPELLANT IN RESPECT OF ESTIMATION OF GROSS PROFIT. THE TRIBUNAL IN ITS ORDER HAS SIMPLY OBSERVED IN PARAGRAPH 6 TO 9 OF THE ORDER AS UNDER: - 3 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ASSESSING OFFICER HAS RE JECTED THE GROUNDS OF THE ASSESSEE UNDER SECTION 145(3) AND APPLIED THE GROSS PROFIT RATE OF THE ASSESSEE UNDER SECTION 145(3) AND APPLIED A GROSS PROFIT RATE OF 2.46%. THE ASSESSING OFFICER HAS CITED TWO OTHER COMPARABLE CASES WHERE GROSS PROFIT RATIO WA S SHOWN AT 2.48% AND 2.44%. THIS IS AGAINST THE ASSESSEES DISCLOSURE OF GROSS PROFIT RATE AT 1.344%. 7. THE CIT (A) HAS ESTIMATED THE VALUE OF FINISHED GOODS AT 20% OF RS.47 87 160/ - WHICH COMES TO RS.9 57 432/ - . THIS ACCORDING TO HIM WAS THE VALUE REQU IRED TO BE ADDED IN THE VALUE OF LAW MATERIAL ARRIVED AT WORK IN PROCESS. 8. WE ARE OF THE VIEW THAT THE GROSS PROFIT RATE TAKEN BY THE ASSESSING OFFICER IS ON THE HIGH SIDE. WE ARE ALSO OF THE VIEW THAT THE PROFIT RATE ARRIVED AT BY CIT(A) IS ON THE LAW SIDE. WE CONFIRM THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE ACCOUNTS OF THE ASSESSEE UNDER S ECTION 145 (3) OF THE I.T. ACT. THE ASSESSING OFFICER IS DIRECTED TO APPLY THE GROSS PROFIT RATE OF 2% AND RECALCULATE THE INCOME OF THE ASSESSEE. 9. THE APPEAL OF THE REVENUE IS PARTLY ALLOWED ON THE FIRST AND SECOND GROUNDS. THE APPEAL OF THE ASSESSEE IS DISMISSED ON THE FIRST AND SECOND GROUNDS. 13. THERE IS NO INDEPENDENT REASONING AS TO WHY THE CIT(APPEALS) IS NOT JUSTIFIED IN REDUCING THE ESTI MATION OF GROSS PROFIT FROM RS.2 53 44 285/ - TO RS.9 57 432/ - . THERE IS ALSO NOT MUCH DISCUSSION AS TO WHY THE GROSS PROFIT ESTIMATED AT 2%. THE TRIBUNAL HAS ALSO NOT CONSIDERED AS TO WHETHER TWO COMPARABLE CASES REFERRED TO BY THE ASSESSING OFFICER ARE RE ALLY COMPARABLE OR ARE APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THIS VIEW OF THE MATTER WE QUASH AND SET ASIDE THE ORDER PASSED BY THE TRIBUNAL AND REMAND THE SAME TO THE TRIBUNAL FOR DECIDING THE APPEAL AFRESH AND WE DIRECT THE 4 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES TRIBUNAL TO PASS A SPEAKING ORDER DEALING WITH THE FINDINGS ARRIVED AT BY THE CIT (APPEALS) AND IF THE TRIBUNAL WERE NOT IN AGREEMENT WITH THE FINDINGS OF THE CIT (APPEALS) THE REASONS FOR SUCH DISAGREEMENT SHOULD SPECIFICALLY BE REFLECTED IN THE ORDER THAT MAY BE PASSED. 14. WITH THIS DIRECTION THIS APPEAL STANDS ALLOWED TO THE AFORESAID EXTENT. 6. AT THE TIME OF HEARING THE LD . C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ONLY ISSUE WHICH HAS BEEN REMANDED BY THE HONBLE HIGH COURT TO THIS TRIBUNAL WAS THE ESTIMATION OF GROSS PROFIT AT THE RATE 2%. ACCORDING TO HIM NO OTHER ISSUE HAS BEEN REMANDED BY THE HONBLE HIGH COURT TO THIS TRIBUNAL. HE ACCORDINGLY RESTRICTED HIS SUBMISSIONS TO ESTIMATION OF GROSS PROFIT. KEEPING IN VIEW THE AFORESAID STATEMENT MADE BY THE LD . C OUNSEL FOR THE ASSESSEE AT BAR AND THE DIRECTIONS OF THE HONBLE HIGH COURT WE SHALL NOW PROCEED TO EXAMINE THE ISSUE OF ESTIMATION OF GROSS PROFIT. 7. THE ISSUE OF ESTIMATION OF GROSS PROFIT IS COMMON IN BOTH THE APPEALS NAMELY THE APPEAL FILED BY THE ASSESSEE AND ALSO THE APPEAL FILED BY THE REVENUE BEFORE THIS TRIBUNAL. SINCE THE ENTIRE ORDER DEALING WITH REJECTION OF BOOKS AND ESTIMATION OF PROFIT HAS BEEN SET ASIDE AND REMANDED BY THE HONBLE HIGH COURT TO THIS TRIBUNAL BOTH THE APPEALS IN SO F AR AS THEY RELATED TO THE AFORESAID ASPECT OF THE CASE WERE SIMULTANEOUSLY TAKEN UP FOR HEARING. 8 . AS STATED EARLIER THE ASSESSEE IS A PRODUCER AND SELLER OF EDIBLE OIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER CALLED FOR MONTH - WISE DETAILS OF PRODUCTION AND MONTH - WISE CONSUMPTION OF POWER. DETAILS OF MONTH - WISE PRODUCTION AND MONTH - WISE CONSUMPTION OF POWER AS FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER ARE GIVEN IN PARAGRAPH 3 OF THE ASSESSMENT ORDER WHICH ARE AS U NDER: - 3. THE ASSESSEE HAS BEEN REQUESTED TO FURNISH THE DETAILS OF PRODUCTION MONTHWISE AND DETAILS OF POWER CONSUMPTION MONTHWISE. THE PRODUCTION IS COMPARED WITH THE ELECTRICITY CONSUMPTION IN THE FOLLOWING TABLE: 5 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES MONTH GN OIL REFINED GN OIL COTTON S EED TOTAL PRODUCTION UNITS OF ELECTRICITY CONSUMED PRODUCTION IN KG. PER UNIT ELECTRICITY CONSUMPTION APRIL 491003 33185 0 524188 18191 28 .81 MAY 324173 9600 0 333773 16444 20.29 JUNE 380930 9241 0 390171 24283 16.06 JULY 314882 9896 0 324778 19113 16. 99 AUGUST 94088 0 0 94088 15702 5.99 SEPTEMBER 95972 0 0 95972 6772 14.17 OCTOBER 493716 18650 0 512366 18324 27.96 NOVEMBER 155182 16175 0 171357 26988 6.34 DECEMBER 443569 74537 27885 545991 27725 19.69 JANUARY 210142 20133 0 230275 25868 8.90 FEB RUARY 70938 9350 9330 89618 25868 3.46 MARCH 20441 35353 282871 338665 11999 28.22 9 . BESIDES THE ASSESSING OFFICER ALSO CALLED FOR MONTH - WISE DETAILS OF CONSUMPTION OF RAW MATERIALS PRODUCTION OF OIL AND YIELD OF GROUNDNUT OIL GROUND NUT REFINED OI L AND COTTON SEED REFINED OIL . THEY ARE GIVEN AT PAGES 5 - 8 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER NOTICED WIDE FLUCTUATION S AND ABNORMALITIES IN THE MONTH - WISE YIELD OF GROUNDNUT OIL GROUNDNUT REFINED OIL AND COTTON SEED OIL. THE ASSESSING OFFICER ALSO ISSUED NOTICES U/S 133(6) OF THE INCOME - TAX ACT TO SEVERAL PARTIES FROM WHOM THE ASSESSEE HAD CLAIMED TO HAVE PURCHASED RAW MATERIALS. NOTICE S ISSUED BY THE ASSESSING OFFICER U/S 133(6) TO ELEVEN OF THEM WERE RETURNED UN - SERVED. 10 . IN VIEW OF THE AFORESAID THE ASSESSING OFFICER CONCLUDED THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE DID NOT REFLECT THE TRUE STATE OF AFFAIRS IN SO FAR AS THE Y RELATED TO PRODUCTION OF GROUNDNUT OIL GROUNDNUT REFINED OIL AND COTTON SEED OIL. RELYING UPON TWO INSTANCES THE ASSESSING OFFICER APPLIED GROSS PROFIT RATE OF 2.46% AS AGAINST 1.34% DECLARED BY THE ASSESSEE AND ACCORDINGLY ADDED A SUM OF RS.2 53 44 285/ - . 1 1 . AGGRIEVED BY THE ORDER PASSED BY THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT(A). THE LD . C OUNSEL FOR THE ASSESSEE EXPLAINED BEFORE THE LD . CIT(A) THAT THE REJECTION OF BOOKS OF ACCOUNTS ON THE BASIS OF CONSUMPTION OF POWER WAS NOT JUSTIFIED AS THE CONSUMPTION OF POWER CANNOT BE SYMMETRICAL AT ALL POINTS OF TIME. HE FURTHER EXPLAINED THAT NOTICES WERE ISSUED BY THE AO U/S 133(6) AT THE END OF THE LIMITATION PERIOD WITH THE RESULT THAT THE ASSESSEE COULD NOT SATISFACTORILY EXPLAIN THE GENUINENESS OF PURCHASES. IT WAS ALSO 6 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES EXPLAINED THAT THE ASSESSEE WAS MAINT AINING STOCK REGISTERS IN WHICH QUANTITATIVE DETAILS WERE RECORDED ON DAY TODAY BASIS. DETAILED SUBMISSIONS MADE BY THE LD . C OUNSEL FOR THE ASSESSEE ARE REPRODUCED IN PARAGRAPH 3 OF THE APPELLATE ORDER PASSED BY THE LD CIT(A). AS REGARDS ESTIMATION OF GROS S PROFIT AT THE RATE OF 2.46% OF THE TURNOVER THE LD . C OUNSEL FOR THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT T WO COMPARABLE CASES RELIED UPON BY THE ASSESSING OFFICER FOR APPLYING GROSS PROFIT RATE OF 2.46% TO THE CASE OF THE ASSESSEE WERE NOT AT ALL C OMPARABLE IN AS MUCH AS THE COMPARABLE CASES CITED BY THE AO RELATED TO SOLVENT MILLS. 12. PARAGRAPH 3.5 OF THE APPELLATE ORDER PASSED BY THE LD CIT(A) IS THE OPERATIVE PORTION OF HIS ORDER. PERUSAL OF THE AFORESAID PARAGRAPH REVEALS THAT THE LD . CIT(A) HAS RECORDED THREE IMPORTANT FINDINGS. IN HIS FIRST FINDING THE LD CIT(A) HAS HELD THAT THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNTS U/S 145(3) IS INVALID AND THEREFORE APPLICATION OF GROSS PROFIT RATE OF 2.46% BY AO IS ALSO INVA LID . HIS SECOND FINDING IS THAT THE COMPARABLE CASES RELIED UPON BY THE ASSESSING OFFICER WERE CASES OF SOLVENT PLANTS AND THEREFORE GROSS PROFIT RATE SHOWN IN THOSE CASES WAS INAPPLICABLE TO THE CASE OF THE ASSESSEE AND RESULTANTLY HELD THAT THE IMPUGNED ADDITION OF RS.2 53 44 285/ - MADE BY THE ASSESSING OFFICER WAS NOT SUSTAINABLE FOR THIS REASON ALSO . HIS THIRD IMPORTANT FINDING IS THAT THE ASSESSEE HA S NOT SHOWN WORK - IN - PROCESS IN ITS BOOKS OF ACCOUNT . H E THEREFORE ADDED A SUM OF RS.9 57 432/ - AS VALUE OF WORK - IN - PROCESS BEING 20% OF THE VALUE OF FINISHED GOODS (20% OF RS.47 87 160/ - ). 1 3 . AGGRIEVED BY THE ORDER PASSED BY THE LD . CIT(A) IN THIS BEHALF THE REVENUE FILED APPEAL BEFORE THIS TRIBUNAL IN WHICH FOLLOWING GROUNDS WERE TAKEN: - 1. THE CIT(A ) - III RAJKOT HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE BOOKS RESULTS REJECTED U/S 145(3) OF THE ACT. 2. THE CIT(A) - III RAJKOT HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION UPTO RS.9 57 432/ - AS AGAINST THE ORIGINAL ADDITION OF RS.2 53 4 4 285/ - AND THEREBY GRANTING RELIEF OF RS.2 43 86 853/ - ON THE ISSUE OF LOW GROSS PROFIT. 7 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE CIT(A) - III RAJKOT MAY KINDLY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY KINDLY BE RESTORED BACK TO THE AB OVE EXTENT. 1 4 . THE ASSESSEE ALSO CHALLENGED THE ORDER OF THE CIT(A) BEFORE THIS TRIBUNAL BY WHICH HE HAS CONFIRMED THE ADDITION TO THE EXTENT OF RS.9 57 432/ - OUT OF RS.2 53 44 285/ - MADE BY THE AO. THE ASSESSEE TOOK THE FOLLOWING GROUNDS IN THIS BEHALF BEFORE THIS TRIBUNAL: 1. THE COMMISSIONER OF INCOME TAX [APPEALS] ERRED IN HOLDING THAT THE VALUE OF CLOSING STOCK OF WORK IN PROGRESS WAS RS.957432/ - . THE APPELLANT SUBMITS THAT THE ESTIMATION OF THE VALUE OF CLOSING STOCK OF WORK IN PROGRESS IS NOT JU STIFIED. 2. WITHOUT PREJUDICE TO GROUND NO.1 THE APPELLANT SUBMITS THAT THE REVALUATION OF CLOSING STOCK AMOUNTING TO RS.957432/ - MAY PLEASE BE DIRECTED TO BE ALLOWED AGAINST INCOME FOR THE A.Y. 2006 - 07. 1 5 . THE APPEAL FILED BY THE REVENUE AND THE ASSESSEE WAS DISPOSED OF BY THIS TRIBUNAL BY ITS COMMON ORDER DATED 16.10.2009 BY WHICH THIS TRIBUNAL DIRECTED THE ASSESSING OFFICER TO APPLY GROSS PROFIT RATE OF 2% AS AGAINST 2.46% APPLIED BY THE ASSESSING OFFICER. IN ABSOLUTE TERMS THE ADDITION OF RS.2 53 44 285 MADE BY THE AO AS A RESULT OF APPLICATION OF GROSS PROFIT RATE OF 2.46% BY HIM STOOD REDUCED TO ABOUT RS.1.49 CRORES AS A RESULT OF APPLICATION OF GROSS PROFIT RATE OF 2% BY THE TRIBUNAL. THE ASSESSEE DID NOT ACCEPT THE AFORESAID ORDER PASSED BY TH IS TRIBUNAL AND ACCORDINGLY CHALLENGED THE SAME BEFORE THE HONBLE HIGH COURT UPON WHICH THE HONBLE HIGH COURT HAS ISSUED THE DIRECTIONS WHICH WE HAVE ALREADY REPRODUCED EARLIER IN THIS ORDER . 1 6 . IN SUPPORT OF HIS CASE THE LD . C OUNSEL FOR THE ASSES SEE MADE T HREE - FOLD SUBMISSIONS ON LINES SIMILAR TO THOSE MADE BEFORE THE CIT(A) . HIS FIRST SUBMISSION WAS THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WHICH WERE ALSO DULY AUDITED U/S 44AB WERE WRONGLY REJECTED BY THE AO. H IS SECOND SUBMISSION W AS 8 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES THAT THE ASSESSING OFFICER HAS WRONGLY REJECTED THE GROSS PROFIT RATE SHOWN BY THE ASSESSEE. HIS THIRD SUBMISSION WAS THAT THE RATE OF GROSS PROFIT APPLIED BY THE ASSESSING OFFICER ON THE BASIS OF TWO COMPARABLE CASES WAS COMPLETELY UNTENABLE IN AS MUCH AS THE COMPARABLE CASES RELATED TO SOLVENT PLANTS WHEREAS THE ASSESSEE WAS NOT ENGAGED IN RUNNING SOLVENT PLANTS. IN SUPPORT OF THE AFORESAID SUBMISSIONS THE LD . C OUNSEL FOR THE ASSESSEE REITERATED TH E SUBMISSION S WHICH WERE EARLIER MADE BY HIM BEFORE TH E LD CIT(A). 1 7 . WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMISSIONS INCLUDING THE DECISIONS REFERRED TO BY THEM AT THE TIME OF HEARING. THE ISSUE S UNDER CONSIDERATION ARE PURELY FACTUAL ISSUE S . IT WOULD THEREFORE BE APPROPRIATE TO BRING ON RECORD ALL THE RELEVANT FACTS WHICH HAVE MATERIAL BEARING ON THE ISSUES UNDER APPEAL. 18. AT THE TIME OF HEARING OUR ATTENTION WAS DRAWN BY THE LD. DEPARTMENTAL REPRESENTATIVE TO PARAGRAPH 7 OF THE JUDGMENT OF THE HONBLE HIGH COURT WHICH READ S AS UNDER: 7. THE MAIN GRIEVANCE RAISED BY MR. SOPARKAR IS THAT THE TRIBUNAL HAS REVERSED THE ORDER OF THE CIT(APPEALS) WITHOUT DISCUSSING THE FINDINGS REACHED BY THE FIRST APPELLATE AUTHORITY AND BY ESTIMATING THE GROSS PROFIT AT 2% AGAINST 2.46% ESTI MATED BY THE ASSESSING OFFICER AND DELETED BY THE CIT(APPEALS) AFTER DUE JUSTIFICATION. HE HAS FURTHER SUBMITTED THAT THE TRIBUNAL HAS CONFIRMED THE REJECTION OF BOOK RESULT AFTER THE ASSESSING OFFICER IN REMAND REPORT HAD ACCEPTED THAT THE DEFECTS IN THE BOOKS HAD BEEN EXPLAINED AND THE COMPARATIVE CASES CITED FOR ADDITION WERE OF SOLVENT PLANTS AND NOT OF AN OIL MILL AND HENCE THE SAID DECISIONS WERE NOT APPLICABLE. 18. IT WAS SUBMITTED BY THE LD. DEPARTMENTAL REPRESENTATIVE THAT THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE BEFORE THE HONBLE HIGH COURT THAT THE ASSESSING OFFICER IN REMAND REPORT HAD ACCEPTED THAT THE DEFECTS IN THE BOOKS HAD BEEN EXPLAINED WERE FACTUALLY INCORRECT SUBMISSIONS MADE BEFORE THE HONBLE HIGH COURT AS THE ASSESSING OFF ICER HAS NEVER ACCEPTED EITHER IN THE REMAND REPORT 9 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES OR EVEN OTHERWISE THAT THE DEFECTS IN THE BOOKS WERE EVER SATISFACTORILY EXPLAINED BY THE ASSESSEE. IN SUPPORT OF HIS SUBMISSIONS HE INVITED OUR ATTENTION TO PARAGRAPH 2 AND 3 OF THE REMAND REPORT DATED 4.8.2008 SUBMITTED BY THE AO TO THE CIT(A) WHICH READ AS UNDER: 2. AS REGARDS THE REJECTION OF BOOK RESULTS AND ADOPTING THE GROSS PROFIT @ 2.46%. IT IS NOTICED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD DISCLOSED GP @ 1.537% 1. 028% AND 1.344% FOR THE AY 2003 - 04 2004 - 05 AND 2005 - 06 RESPECTIVELY. THEREFORE THE ASSESSEE WAS ASKED TO EXPLAIN THE REASONS FOR REDUCTION IN GROSS PROFIT. HOWEVER THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND CONVINCING BY THE ASSESSING OFFICER. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE DETAILS OF MONTH - WISE PRODUCTION AND DETAILS OF RAW - MATERIAL/POWER CONSUMPTION WAS CALLED FOR. THE PRODUCTION WAS COMPARED WITH THE ELECTRICITY CONSUMPTION. ON VERIFICATION OF THE SAME IT WAS NOTICED THAT THERE WAS A WIDE VARIATION RANGING FROM 3.46 KG PER UNIT TO 28.81 KG. PER UNIT. FROM THE DETAILS FURNISHED IT IS ALSO NOTICED THAT THE CONSUMPTION OF GROUND NUT THE DISCREPANCY IN THE MONTHLY YIELD OF GROUND NUT. FURTHER THE CONSUMPTION OF GROUND N UT OIL CONSUMPTION OF GROUND NUT DETAILS OF OPENING AND CLOSING STOCK FURNISHED BY THE ASSESSEE IN FORM OF STATEMENT. ON VERIFICATION OF THE SAME IT IS NOTICED THAT THE PRODUCTION AND CONSUMPTION OF GROUND NUT AND GROUND NUT OIL IS FULL OF DISCREPANCIES . IN THE PRODUCTION AND CONSUMPTION OF COTTON SEEDS EXP OIL AND PRODUCTION OF COTTON SEED REFINED OIL IS FULL OF DISCREPANCIES. ON THIS ISSUE THE LD. ADDL. CIT RANGE - 2 RAKOT HAS DISCUSSED THE ISSUE IN DETAILED IN THE ASSESSMENT ORDER AND FURTHER DISCUSS ION HE HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNT U/S 145(3) OF THE ACT AND ESTIMATED THE GP @ 2.46%. I HAVE NO FURTHER COMMENTS TO OFFER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS REQUESTED TO EXPLAIN THE DISCREPANCIES HOWEVER THE ASS ESSEE HAS NOT EXPLAIN THE REASONS SATISFACTORILY. THEREFORE THE ADDL. EVIDENCES PRODUCED BY THE ASSESSEE BEFORE YOUR HONOUR MAY KINDLY BE NOT TO CONSIDER. 10 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES 19. IN SPITE OF OUR CAREFUL PERUSAL OF THE AFORESAID REMAND REPORT WE COULD NOT FIND ANYTHING IN THE SAID REMAND REPORT OF THE AO WHICH WOULD EVEN REMOTELY SUGGEST THAT THE ASSESSING OFFICER IN HIS REMAND REPORT HAD ACCEPTED THAT THE DEFECTS IN THE BOOKS HAD BEEN EXPLAINED BY THE ASSESSEE . IN FACT THE REMAND REPORT RECORDS FINDINGS OF THE AO THAT THE DISCREPANCIES IN THE BOOKS OF ACCOUNT DETECTED BY HIM WERE NOT SATISFACTORILY EXPLAINED EVEN IN REMAND PROCEEDINGS . SINCE WE COULD NOT LOCATE ANY SUCH OBSERVATION MADE BY THE AO IN THE REMAND REPORT AS WAS REPRESENTED BEFORE THE HONBLE HIGH COURT (PARA 7 OF THE JUDGMENT) WE REQUESTED THE LD . COUNSEL FOR THE ASSESSEE TO ENLIGHTEN US IN THIS BEHALF AND TO SUBSTANTIATE THE SUBMISSIONS MADE BEFORE THE HONBLE HIGH COURT . HE HOWEVER EXPRESSED HIS INABILITY TO SUBSTANTIATE THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE BEFORE THE HONBLE HIGH COURT THAT THE ASSESSING OFFICER IN REMAND REPORT HAD ACCEPTED THAT THE DEFECTS IN THE BOOKS HAD BEEN EXPLAINED. IN THIS VIEW OF THE MATTER WE HAVE NO HESITATION TO HOLD THAT THE CASE OF THE AO HAS ALL ALONG BEEN THAT T HERE WERE SERIOUS DISCREPANCIES IN THE BOOKS WHICH WERE NEVER SATISFACTORILY EXPLAINED AND NOT THAT THE ASSESSEE HAD EXPLAINED THEM SATISFACTORILY AS REPRESENTED BEFORE THE HONBLE HIGH COURT . 20. BE THAT AS IT MAY THE MATTER NOW STANDS RESTORED TO THE FILE OF THIS TRIBUNAL. WE HAVE THEREFORE INDEPENDENTLY EXAMINED ALL THE RELEVANT ASPECTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LAW. THE ASSESSEE - FIRM ITSELF FILED DETAILS GIVING MONTH - WISE PRODUCTION OF OIL AND MONTH - WISE CONSUMPTION OF POWER. THE Y HAVE BEEN EXTRACTED FROM THE ASSESSMENT ORDER AND REPRODUCED EARLIER IN THIS ORDER. THE ASSESSEE IS ENGAGED IN THE PRODUCTION OF GROUNDNUT OIL GROUNDNUT REFINED OIL AS WELL AS SMALL QUANTITY OF COTTON SEED OIL. IN THE MONTH OF APRIL THE ASSESSEE REPORT ED PRODUCTION OF 4 91 003 KGS . OF GROUNDNUT OIL AND 33 185 KGS OF REFINED GROUNDNUT OIL FOR WHICH IT REPORTED CONSUMPTION OF 18 191 UNITS OF POWER WHICH RESULTED IN AVERAGE P RODUCTION OF 28.81 KG. OF OIL FOR EACH UNIT OF POWER CONSUM ED. IN THE MONTH OF DEC EMBER THE ASSESSEE REPORTED PRODUCTION OF 4 43 569 KGS OF GROUNDNUT OIL 74 537 KGS OF REFINED GROUNDNUT OIL AND 27 885 KGS OF COTTON - SEED OIL AGAINST CONSUM PTION OF 27725 UNITS OF POWER RESULTING IN AVERAGE PRODUCTION OF 19.69 KG. OF OIL FOR EACH UNIT OF POWER CONSUMED AS AGAINST AVERAGE PRODUCTION OF 11 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES 28.81 KGS . OF OIL AGAINST EACH UNIT OF POWER CONSUMED IN THE MONTH OF APRIL. IN THE MONTH OF MARCH THE ASSESSEE REPORTED PRODUCTION OF 20 441 KGS . OF GROUNDNUT OIL 35 353 KGS . OF GROUNDNUT REFINED OIL AND 2 82 871 KGS OF COTTON SEED OIL AGAINST 11999 UNITS OF POWER CONSUMED RESULTING IN A VERAGE P RODUCTION OF 28.22 KG . AGAINST EACH UNIT OF POWER CONSUMED . SIMILARLY PRODUCTION ( IN KG .) OF OIL AGAINST EACH UNIT OF POWER CONSUMED IN THE MONTH OF AUGUST WORK ED OUT TO 5.99 KGS . THE FIGURES AS SUPPLIED BY THE ASSESSEE AND REPRODUCED IN PARAGRAPH 3 OF THE ASSESSMENT ORDER GIVE A CLEAR INDICATION THAT THE PRODUCTION RECORDED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT IS COMPLETELY INCONSISTENT WITH THE PATTERN OF POWER CONSUMED. THERE CAN BE SOME FLUCTUATION S IN THE CONSUMPTION OF POWER ON DAY - TO - DAY BASIS BUT SUCH FLUCTUATIONS HAVE GOT TO BE WITHIN REASONABLE LIMITS. ONCE THE AVERAGE FOR THE WHOLE MONTH IS TAKEN AS IT HAS BEEN TAKEN BY THE ASSESSEE - FIRM ITSELF THE DAY - TO - DAY FLUCTUATIONS OR ASYMMETRICAL CONSUMPTION OF POWER AT TIMES ARE AUTOMATICALLY TAKEN CARE OF. THE CONSUMPTION OF POWER IS DIRECTLY LINKED WITH THE PRO DUCTION. CONSUMPTION OF POWER IS RECORDED AND CHARGED BY THE ELECTRICITY BOARD/ POWER SUPPLYING COMPA NY AND THEREFORE THE ASSESSEE CANNOT CHANGE THOSE FIGURES OF UNITS WHICH HAVE ACTUALLY BEEN CONSUMED . FIGURES OF PRODUCTION ON THE OTHER HAND ARE RECORDED BY THE ASSESSEE ITSELF IN ITS BOOKS . ALL THE MACHINES USED IN INDUSTRIES ARE POWER RATED WHICH MEAN S THAT THE RUNNING OF OIL MILL AND CONSEQUENTIAL PRODUCTION OF OIL DEPENDS TO A LARGE EXTENT ON RATED CONSUMPTION OF POWER. CONSUMPTION OF POWER IS ONE OF THE MOST OBJECTIVE CRITERIA TO ASSESS THE RUNNING OF THE MILL AND CONSEQUENTIAL PRODUCTION. SUBJECT T O SOME ADJUSTMENTS THE UNITS OF POWER CONSUMED GIVE A FAIRLY GOOD IDEA ABOUT THE RUNNING OF THE MILL AND CONSEQUENTIAL PRODUCTION ACHIEVED. AT THE TIME OF HEARING THE LD . C OUNSEL FOR THE ASSESSEE WAS SPECIFICALLY ASKED TO SPELL OUT THE REASONS FOR SUCH L OWER PRODUCTION OF OIL AS REPORTED BY THE ASSESSEE IN CERTAIN MONTHS QUA THE POWER CONSUMED . HE HOWEVER EXPRESSED HIS INABILITY TO DO SO. ALL THE REASONS GIVEN BY THE ASSESSEE BEFORE THE LD . CIT(A) IN THIS BEHALF DO NOT SATISFACTORILY EXPLAIN THE REASON S F OR SUCH LOWER PRODUCTION QUA CONSUMPTION OF POWER IN ALL THE OTHER MONTHS OF YEAR AS COMPARED TO THE MONTH OF APRIL. THERE IS THUS NO SATISFACTORY EXPLANATION FOR LOWER PRODUCTION IN SEVERAL MONTHS OF THE YEAR UNDER APPEAL AGAINST POWER CONSUM ED. 12 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES ANOTHER I MPORTANT ASPECT WHICH CANNOT BE LOST SIGHT OF IS THE MONTH - WISE YIELD OF GROUNDNUT OIL GROUNDNUT REFINED OIL AND REFINED COTTON SEED OIL. THERE IS WIDE AND ABNORMAL FLUCTUATION IN THE MONTH - WISE YIELD OF GROUNDNUT OIL REFINED GROUNDNUT OIL AND COTTON S EED OIL. THERE IS NO SATISFACTORY EXPLANATION FOR SUCH WIDE FLUCTUATION S . YET A NOTHER FACT OF SIGNIFICANCE WHICH HAS BEEN HIGHLIGHTED BY THE LD . CIT(A) IN HIS APPELLATE ORDER IS THAT THE ASSESSEE HAS NOT RECORDED WORK - IN - PROCESS IN ITS BOOKS OF ACCOUNT W HICH LED THE LD . CIT(A) HIMSELF TO MAKE ADDITION OF RS.9 57 432 . WE ARE IN AGREEMENT WITH THE OBSERVATION OF THE CIT(A) THAT IT IS NOT POSSIBLE TO HAVE NIL WORK - IN - PROCESS IN OIL PRODUCING MILLS. THIS SHOWS THAT THE PURCHASES OF RAW MATERIALS THEIR PROCES SING AND ULTIMATE PRODUCTION HAVE NOT BEEN CORRECTLY SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. IN THE FACE OF THE SUCH MATERIALS ON RECORD WE ARE CONVINCED THAT THE ASSESSEE HAS NOT RECORDED PROCUREMENT AND PROCESSING OF RAW MATERIALS AS ALSO PRODUC TION AND SALE OF OIL TRULY AND CORRECTLY IN ITS BOOKS OF ACCOUNT AND THEREFORE THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE CANNOT BE SAID TO BE CORRECT AND COMPLETE TO THAT EXTENT . FINDING RECORDED BY THE LD. CIT(A) THAT THERE IS NO DEFECT IN THE BOOKS OF ACCOUNT IS THEREFORE UNSUSTAINABLE. HAVING HELD THAT THE ASSESSEE HAS NOT RECORDED WORK - IN - PROCESS IN ITS BOOKS AND CONSEQUENTLY MADE ADDITION OF RS.9 57 432/ - ON THAT BASIS IT WAS NOT OPEN TO THE CIT(A) TO HOLD THAT THERE WERE NO DEFECTS IN THE BOOKS OF ACCOUNT. THE DECISION OF THE CIT(A) IN THIS BEHALF THEREFORE DESERVES ON THE FACTS OF THE CASE TO BE VACATED AND IS ACCORDINGLY VACATED. 21 . AS REGARDS THE ESTIMATION OF GROSS PROFIT THE ASSESSING OFFICER HAS APPLIED GROSS PROFIT RATE OF 2.46% ON THE BASIS OF TWO COMPARABLE CASES AND MADE ADDITION OF RS.2 53 44 285/ - . IT IS STATED BY THE LD . C OUNSEL FOR THE ASSESSEE THAT THOSE TWO COMPARABLE CASES ARE OF SOLVENT PLANTS AND WHEREAS THE ASSESSEE IS NOT RUNNING SOLVENT PLANTS AND THEREFORE THE GROSS PROFIT RATES SHOWN IN THE AFORESAID TWO COMPARABLE CASES WERE N EITHER COMPARABLE WITH NOR APPLICABLE TO THE CASE OF THE ASSESSEE . AT THE TIME OF HEARING THE LD . C OUNSEL FOR THE ASSESSEE WAS REQUESTED TO FURNISH ANY CASE WHICH HE CONSIDERS TO BE COMPARABLE WITH THE CASE OF THE ASSESSEE. IN REPLY THE LD . C OUNSEL FOR THE ASSESSEE HAS RELIED UPON THE CASE OF M/S. KANERIA OIL INDUSTRIES AS A COMPARABLE CASE IN WHICH GP RATE HAS BEEN SHOWN 13 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES AT 1. 39 %. WE HAVE PERUSED THE DETAILS PERTAINING TO M/S.KANERIA OIL INDUS TRIES AS FURNISHED BY THE LD . C OUNSEL FOR THE ASSESSEE AND FIND THAT M/S. KANERIA OIL INDUSTRIES IS A MERE TRADER AND NOT A PRODUCER/ MANUFACTURER. THE ASSESSEE BEFORE US IS A PRODUCER/ MANUFACTURER. IT IS THUS CLEAR THAT THE ASSESSEE HAS ALSO NOT BEEN ABLE TO FURNISH ANY COMPARABLE CASE SO AS TO JUSTIFY ITS OWN GP RATE WITH THE GP RATE SHOWN IN A NY COMPARABLE CASE . BE THAT AS IT MAY THE RATE OF GROSS PROFIT IS GENERALLY HIGHER IN CASES OF PRODUCERS/ MANUFACTURERS THAN IN CASES OF MERE TRADERS. BESIDES CASES OF SOLVENT PLANT MAY NOT BE EXACTLY COMPARABLE BUT THEY DO THROW SOME LIGHT ON THE PATTERN OF RATE OF GROSS PROFIT IN OIL INDUSTRY. 22 . THE FACT THAT THE ASSESSEE HAS NOT SHOWN ANY WORK - IN - PROCESS AT THE END OF THE YEAR COUPLED WITH THE FACT THAT THE FI GURES OF PRODUCTION REPORTED BY THE ASSESSEE IN SEVERAL MONTHS OF THE YEAR ARE SUBSTANTIALLY LOWER VIS - - VIS EACH UNIT OF POWER CONSUMED INDICATES THAT THE ASSESSEE HAS PROCURED AND PROCESSED RAW MATERIALS OUTSIDE THE BOOKS AND ALSO SOLD THEM OUTSIDE THE B OOKS. AS STATED EARLIER THE FIGURES OF MONTH - WISE PRODUCTION OF OIL GIVEN BY THE ASSESSEE ARE NOT CONSISTENT WITH THE MONTH - WISE CONSUMPTION OF POWER REPORTED BY THE ASSESSEE. THE ASSESSEE HAS FAILED TO OFFER ANY SATISFACTORY EXPLANATION IN THIS BEHALF. P OWER CANNOT FLY AWAY OR DISAPPEAR. UNLESS THE MACHINE IS ACTUALLY RUN AND THE OIL IS EXPELLED THE POWER CANNOT BE CONSUMED. POWER IS CHARGED ON THE BASIS OF UNITS OF POWER ACTUALLY CONSUMED IN RUNNING A MILL. SINCE THE AO HAS TAKEN IN PARA 3 OF THE ASSES SMENT ORDER FIGURES OF AVERAGE PRODUCTION VIS - - VIS CONSUMPTION OF EACH UNIT OF POWER ON MONTHLY BASIS CARE IS AUTOMATICALLY TAKEN OF FLUCTUATIONS OR OCCASIONAL ASYMMETRICAL CONSUMPTION OF POWER OR LEAKAGES IN CONSUMPTION OF POWER ON DAY - TO - DAY BASIS. 2 3 . THE ASSESSEE - FIRM ITSELF HAS REPORTED AVERAGE PRODUCTION /YIELD OF 28.81 KGS OF OIL AGAINST EACH UNIT OF POWER CONSUMED IN THE MONTH OF APRIL 2004. IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION T HE AFORESAID FACT PROVIDES A REASONABLE BASIS FOR WORKING OUT THE SUPPRESSED PRODUCTION ON THE BASIS OF UNITS OF POWER CONSUMED IN THE REMAINING MONTHS OF THE YEAR. CALCULATED IN THE AFORESAID MANNER THE QUANTITY OF SUPPRESSED PRODUCTION OF OIL IN THE YEAR UNDER APPEAL WORK S OUT TO ABOUT 31 84 708 KGS OF OIL. A CCORDING TO THE ASSESSEE - FIRM THE AVERAGE SELLING PRICE 14 179 & 180 - RJT - 2009 RAJMOTI INDUSTRIES OF OIL WAS ABOUT RS. 800 PER 15 KG. IN THE YEAR UNDER APPEAL. SUPPRESSED VALUE OF SALE THUS WORKS OUT TO ABOUT RS.16.98 CRORES. EVEN IF MODEST MARGIN OF 2% (BEING THE DIFFERENCE IN SELLING PRICE OF F INISHED GOODS AND THE COST OF RAW MATERIAL S CONSUMED) IS APPLIED ON SUCH SUPPRESSED SALES THE RESULTANT ADDITION ON ACCOUNT OF SUPPRESSED PROFIT ALONE WOULD BE ABOUT RS.3.40 CRORES. THEN FURTHER ADDITION ON ACCOUNT OF INITIAL INVESTMENTS IN PROCUREMENT O F RAW MATERIAL S OUTSIDE THE BOOKS WOULD ALSO HAVE TO BE CONSIDERED. IF ALL THE AFORESAID FACTORS ARE TAKEN INTO ACCOUNT THE RESULTANT ADDITION WOULD BE MUCH MORE THAN WHAT THE AO HAS MADE (I.E. RS.2 5 3 44 285/ - ) OR WHAT THIS TRIBUNAL HAS EARLIER CONFIRME D (I.E. ABOUT RS.1.49 CRO R ES). IT MAY HOWEVER BE STATED THAT THE E ARLIER ORDER PASSED BY THIS TRIBUNAL BY WHICH THE AO WAS DIRECTED TO APPLY GROSS PROFIT RATE OF 2% AS AGAINST 2.46% APPLIED BY HIM WAS NOT CHALLENGED BY THE REVENUE BEFORE THE HONBLE HIGH COURT WHICH MEANS THAT THE REVENUE WAS SATISFIED WITH THE EARLIER ORDER PASSED BY THIS TRIBUNAL. IN THIS VIEW OF THE MATTER WE SUSTAIN A DDITION ON THE FACTS OF THE CASE TO THE EXTENT OF RS. 1.49 CRORES (AS ORIGINALLY SUSTAINED BY TH IS TRIBUNAL BY APPLY ING GROSS PROFIT RATE OF 2%) OUT OF TOTAL ADDITION OF R S . 2 53 44 285/ - MADE BY THE AO (BY APPLYING GROSS PROFIT RATE OF 2.46%) TOWARDS GROSS PROFIT . THE ISSUE AS RESTORED BY THE HONBLE HIGH COURT TO THIS TRIBUNAL IS DISPOSED OF ACCORDINGLY. FOR STATISTIC AL PURPOSES BOTH THE APPEALS SHALL BE TREATED AS THEY WERE ORIGINALLY TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED ON 31 . 0 7 . 201 3 SD/ - SD/ - (T. K. SHARMA) ( D. K. SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT: 31 .07 .2013 B T COPY OF ORDER FORWARDED TO: - 1 . APPELLANT M/S RAJMOTI INDUSTRIES BHAVNAGAR ROAD RAJKOT 2 . RESPONDENT - DCIT CIR - 2 RAJKOT 3 . CONCERNED CIT - I I RAJKOT 4 . CIT(A) - I II RAJKOT 5 . DR ITAT RAJKOT 6 . GUARD FILE. BY ORDER TRUE COPY PRIVATE SECRETARY ITAT RAJKOT