THE SOFT ICE CREAM CO. PVT. LTD, MUMBAI v. ACIT 7(3), MUMBAI

ITA 2837/MUM/2009 | 1993-1994
Pronouncement Date: 31-03-2010 | Result: Allowed

Appeal Details

RSA Number 283719914 RSA 2009
Assessee PAN AAACT1427B
Bench Mumbai
Appeal Number ITA 2837/MUM/2009
Duration Of Justice 10 month(s) 27 day(s)
Appellant THE SOFT ICE CREAM CO. PVT. LTD, MUMBAI
Respondent ACIT 7(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 31-03-2010
Assessment Year 1993-1994
Appeal Filed On 04-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI N.V. VASUDEVAN JM AND SHRI T.R. SOOD AM I.T.A.NOS.2837 & 2838/MUM/2009 ASSESSMENT YEARS :1993-94 & 1994-95 M/S. THE SOFT ICE-CREAM CO. PVT. LTD. 268 A-Z INDUSTRIAL ESTATE LOWER PAREL MUMBAI 400 013. PAN: AAACT 1427 B VS. THE ASST. COMMISSIONER OF INCOME- TAX-7(3) AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.V. JHAVERI RESPONDENT BY : SHRI NAVEEN GUPTA O R D E R PER T.R. SOOD AM: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AG AINST TWO SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS)-VII MUMBAI BOTH DATED 13.02.2009 AND PERTAIN TO THE ASSESSMENT YEAR S 1993-94 AND 1994- 95.THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 2837/MUM/2009 : ASST.YEAR 1993-94 2. IN THIS APPEAL VARIOUS GROUNDS HAVE BEEN GIVEN B UT AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ONLY ISSUE INVOLVED IS IN RESPECT OF THE CONFIRMATION OF ADDIT ION AMOUNTING TO RS.21 90 402/- ON ACCOUNT OF UNACCOUNTED SALES WHICH WERE ESTIMATE D BECAUSE OF DIFFERENCES FOUND IN THE RECORDS FOUND DURING THE SEARCH. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ASSESSEE IS MANUFACTURING AND SELLING SOFT ICE-CREAM FROM VARIOUS PARLOURS IN MUMBAI. THE ASSESSEE COMPANY HAD INSTALLED SOFT ICE-CREAM MACHINES ON TH E PREMISES OF VARIOUS PARTIES IN VARIOUS LOCATIONS ON THE BASIS OF PROFIT SHARING . THE ICE-CREAM MIX IS MADE OF MILK CREAM FLAVORS ETC. AND IS STORED IN THE TAN K ATTACHED TO THE MACHINE. THE I.T.A.NOS.2837 & 2838/MUM/2009 THE SOFOT ICE-CREAM CO. PVT. LTD. 2 ICE-CREAM IS DISPENSED FROM THE MACHINE EITHER ON A BISCUIT CONE OR IN A CUP AND TOPPINGS ARE ALSO ADDED. WHEN AN ORDER IS PLACED TH E CASH REGISTER WILL GENERATE A CASH BILL AND ON PRODUCTION OF THE SAME THE ICE-CR EAM IS DELIVERED TO THE CUSTOMER. A SEARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 28 TH OCTOBER 1993 WHEREIN VARIOUS BOOKS AND DOCUMENTS W ERE FOUND AND SEIZED. CONSUMPTION RECORD WERE ALSO FOUND AND SEIZED IN TH E PARLOURS AT JUHU BANDRA AND BREACH CANDY. THESE CONSUMPTION RECORDS SHOWED VARIOUS ITEMS USED IN PREPARING THE SOFT-ICE CREAM AND CONSUMPTION OF THE SAME FOR A PARTICULAR MONTH. THE SALES WERE RECORDED AT THE BOTTOM OF THE CONSUM PTION STATEMENT. ON THE BASIS OF THESE STATEMENTS IT WAS FOUND THAT SALES IN BANDRA AND JUHU PARLOURS TALLIED. HOWEVER THERE WERE DIFFERENCES IN THE CA SE OF BREACH CANDY . A.O. NOTICED THAT IN THE CASE OF BREACH CANDY PARLOURS SALES WERE RECORDED AT A LESSOR FIGURE BY A SUM OF RS. 7 45 730/-. THE ASSESSEE HAD SHOWN 45% GROSS PROFIT RATE DURING THE YEAR WHEREAS THE GROSS PROFIT IN EARLIER YEAR I.E. A.Y. 1992-93 SHOWN BY THE ASSESSEE WAS 59%. THEREFORE A.O. ASSUMED G.P. RATE OF 54% AND ACCORDINGLY THE CONSUMPTION OF THE RAW MATERIAL WAS TAKEN AT 46%. ON THIS BASIS ON THE TOTAL CONSUMPTION OF RS. 36 38 353/- THE SAL ES WERE ESTIMATED AT RS. 90 95 882/- WHEREAS THE ASSESSEE HAD DECLARED THE SALES AT RS.66 62 101/-. THUS THE DIFFERENCE OF RS. 24 32 779/- WERE TREATED AS U NACCOUNTED SALES AND AFTER ALLOWING THE ESTIMATION AT 10% EXPENSES THE NET AD DITION OF RS.21 90 402/- WAS MADE BY THE ASSESSING OFFICER. 4. ON APPEAL THE LEARNED CIT(A) OBSERVED THAT THE A.O. HIMSELF OBSERVED IN THE ASSESSMENT ORDER THAT FIGURES OF THE SALES TALL IED IN RESPECT OF THE PARLOURS EXCEPT SNOWMAN PARLOUR (I.E. BREACH CANDY PARLOUR ) AND THEREFORE SALES FOR BANDRA AND JUHU PARLOURS COULD NOT HAVE BEEN ESTIMA TED. SECONDLY FOR ALLOWING AT A GROSS PROFIT AND COMPARING THE SAME FOR EARLIER Y EARS CONSUMABLE STORES WERE ALSO REQUIRED TO BE REDUCED WHICH WILL ACCOUNT FOR 4% OF THE G.P. FALL. IT WAS I.T.A.NOS.2837 & 2838/MUM/2009 THE SOFOT ICE-CREAM CO. PVT. LTD. 3 OBSERVED THAT ANOTHER LEADING CONCERN IN THIS INDUS TRY KNOWN AS M/S. KWALITY FROZEN FOODS LTD. HAD SHOWN G.P. RATE OF 45%. ULT IMATELY IT WAS NOTICED THAT SALES IN SNOWMAN PARLOUR WERE AGGREGATING TO RS. 17 56 103/- AND THEREFORE IF ANY ESTIMATION WAS REQUIRED IT HAS TO BE RESTRICTED TO THIS FIGURE AND ACCORDINGLY LEARNED CIT(A) REDUCED THE ADDITION BY RS.15 78 865 /-AND CONFIRMED THE ADDITION OF RS. 6 11 537/-. 5. AGAINST THIS ORDER BOTH THE PARTIES WENT IN APPE AL BEFORE THE TRIBUNAL. IT WAS FELT BY THE TRIBUNAL THAT SOME ADDITIONAL EVIDE NCE HAS BEEN PRODUCED BEFORE THE CIT(A) THEREFORE THE MATTER WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR DENVO DECISION. 6. IN THE SECOND ROUND OF ASSESSMENT AO MAINLY REIT ERATED THAT THE ASSESSEE HAD NOT FURNISHED ANY FRESH MATERIAL AND T HEREFORE THE ADDITION HAS BEEN REPEATED MAINLY ON THE BASIS THAT ASSESSEE HAD SHOW N LESSOR SALES IN BREACH CANDHI PARLOUR AND PARTICULARLY SALES IN THE SUMME R MONTHS SHOULD HAVE BEEN MORE. 7. ON APPEAL THE ADDITION HAS BEEN CONFIRMED BY TH E LEARNED CIT(A). 8. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADMITTEDLY THERE WAS NO DIFFERENCE IN SALES FOR BANDRA AND JUH U PARLOURS AND IN THIS REGARD HE REFERRED TO THE LETTER WRITTEN BY THE ASSESSING OF FICER ON 20 TH DECEMBER 1995 WHICH IS PLACED AT PAGE 35 OF THE PAPER BOOK. HE A LSO REFERRED TO PAGE 16 A AND 18A OF THE PAPER BOOK WHICH GIVES THE DETAILS REFERRED IN THE SEIZED MATERIAL AND BOOKS OF ACCOUNT AND WOULD SHOW THAT THE DIFFER ENCE IS NEGLIGIBLE. HE ARGUED IN THE CASE OF BREACH CANDY PARLOUR THERE WAS NO EL ECTRONIC CASH REGISTER AND THAT IS WHY CASH ROLLS WERE NOT GENERATED AND NOT FOUND. HOWEVER THE DIFFERENCE IN SALES HAS BEEN WORKED OUT BY THE A.O. ON THE BASIS OF CONSUMPTION RECORDS THE DETAILS OF WHICH ARE AT PAGE 20A OF THE PAPER BOOK. THESE DETAILS HAVE BEEN I.T.A.NOS.2837 & 2838/MUM/2009 THE SOFOT ICE-CREAM CO. PVT. LTD. 4 WORKED OUT MAINLY ON THE BASIS OF CONSUMPTION OF G. P.RATE AT 54% WHICH IS NOT CORRECT WITHOUT FINDING ANY DEFECT IN THE BOOKS OF ACCOUNT. 9. HE VEHEMENTLY ARGUED THAT WHEN NO DIFFERENCE WAS FOUND IN THE SALES IN RESPECT OF TWO PARLOURS HOW THE ASSESSING OFFICER C OULD HAVE ESTIMATED THE SALES FOR THE WHOLE OF THE BUSINESS. HE FURTHER SUBMITTED THAT ADDITIONS ON ACCOUNT OF UNDISCLOSED SALES HAVE ALREADY BEEN DELETED BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 1992-93 IN ITA NO. 1813/MUM/07 AND ONE OF THE REASONS FOR DELETING THE SALES WAS THAT SUCH SALE HAS ALREADY BEEN ACCEPTED BY THE SALES-TAX AUTHORITIES. HE ARGUED THAT IN THE PRESENT YEAR ALSO THE SALES O F RS. 66 62 101/- HAVE ALREADY BEEN ACCEPTED BY THE SALES-TAX AUTHORITIES AND IN T HIS REGARD HE REFERRED TO THE SALES-TAX ASSESSMENT ORDER PLACED AT PAGES 117-118 OF THE PAPER BOOK. 10. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT ADDITION WAS DELETED BY THE TRIBUNAL BECAUSE A DDITION ON ACCOUNT OF G.P. WAS CONFIRMED PARTLY IN THE ASSESSMENT YEAR 1992-93 BY THE TRIBUNAL. HE SUBMITTED THT IN THAT YEAR THE ASSESSEE HAD DECLARED GROSS PROFIT RATE OF 59% WHEREAS THE ASSESSING OFFICER HAD ESTIMATED THE SAME AT 62.17% AND THE SAME WAS CONFIRMED AT 61%. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND FIND THAT IN THE ASSESSMENT YEAR 1992-93 THE MATTER REGARDING ADDITI ON ON ACCOUNT OF SALES TRAVELED TO TRIBUNAL AND THE SAME WAS DECIDED VIDE PARA 14 WHICH READS AS UNDER: THE ABOVE CHART CLEARLY SHOWS THAT SALES RECORDED IN CASH ROLES FOUND DURING THE SEARCH AND SALES RECORDED IN THE BOOKS O F ACCOUNTS TALLIES MORE OR LESS AND THERE IS SLIGHT VARIATION WHICH COULD B E THERE BECAUSE OF OVERLAPPING IN DEPOSIT OF CASH IN THE NEXT DAY OR E VEN CANCELLATION F THE SALE BILLS BECAUSE OF REFUSAL OF THE CUSTOMER TO AC CEPT THE ICE-CREAM. IN OUR HUMBLE VIEW DIFFERENCE BETWEEN SALES RECORDED I N THE CASH ROLES WHICH WERE FOUND DURING THE SEARCH AND ACTUAL SALES RECOR DED IN THE BOOKS OF ACCOUNTS IS VERY NEGLIGIBLE AND THEREFORE NO ADDITI ON COULD HAVE BEEN MADE BY ESTIMATING THE SALES AT RS. 84 66 395/- INSTEAD OF RS. 43 75 372/-. OUR VIEW IS FURTHER FORTIFIED BY THE FACT THAT THE SALE S DECLARED BY THE ASSESSEE HAVE BEEN ACCEPTED BY THE SALES-TAX DEPARTMENT ALSO . THEREFORE AS FAR AS ADDITION ON ACCOUNT OF SALES IS CONCERNED WE SET A SIDE THE ORDER OF THE LD.CIT(A) AND DELETE THE SAME. I.T.A.NOS.2837 & 2838/MUM/2009 THE SOFOT ICE-CREAM CO. PVT. LTD. 5 2. WE FURTHER FIND THAT IT IS NOT DENIED BEFORE US THAT THERE WAS NO DISCREPANCY IN RESPECT OF SALES FOUND IN THE CASE O F JUHU AND BANDRA PARLOURS. THE ONLY DIFFERENCE FOUND WAS IN RESPECT OF BREACH CAND Y PARLOUR THE DETAILS OF THE SAME ARE AS UNDER: MONTH SALE AS PER BOOKS SALE RECORDED IN SEIZED MATERIAL A-3 DIFFERENCE PAGE A-3 PAGE NO. OF P. BOOK APRIL 92 265 060 447 480 (182 420) 98 25 MAY 92 244 848 470 731 225 883) 95 24 JUNE 92 358 974 - - JULY 92 268 740 - - AUG 92 314 069 285 675 28 3994 92 23B SEPT.92 225 778 271 831 (46 053) 85 23A OCT.92 356 264 - - NOV. 92 305 624 - - DEC. 92 283 060 475 400 (192 340) 80 21 JAN. 93 204 392 - - FEB. 93 235 064 - - MAR. 93 306 982 - - TOTAL 3 368 885 (745 730) FROM THE ABOVE IT IS CLEAR THAT SEIZED MATERIAL WAS NOT AVAILABLE FOR MANY MONTHS. FURTHER IN THE MONTH OF AUGUST 1992 THE SALES AS P ER SEIZED MATERIAL WAS RS.3 14 069/- WHEREAS SALES AS PER BOOK WERE RS.2 8 5 675/- WHICH MEANS SALES RECORDED IN THE BOOKS WERE MORE. THERE SEEMS TO BE DIFFERENCE OF RS. 7 45 730/- IN ALL THE MONTHS FOR WHICH MATERIAL WAS SEIZED BUT THIS IS NO INDICATOR ON ANY SIDE. WE ALSO FIND THAT SALES-TAX DEPARTMENT HAVE ACCEPTE D THE SALES DECLARED BY THE ASSESSEE AT RS.66 62 101/- AS IS CLEAR FROM THE SAL ES-TAX ASSESSMENT ORDER COPY OF WHICH IS PLACED AT PAGES 118-119 OF THE PAPER BOOK. AS OBSERVED BY THE TRIBUNAL IN EARLIER YEARS THAT IF THERE IS NO DIFFERENCE IN THE SALES DECLARED BEFORE THE SALES- TAX AUTHORITIES THEN THE ADDITION IS NOT SUSTAINABL E. FOLLOWING THAT ORDER WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND DELETE TH E ADDITION MADE ON ACCOUNT OF UNACCOUNTED SALES. ITA NO.2838/MUM/2009 : ASSESSMENT YEAR: 1994-95 I.T.A.NOS.2837 & 2838/MUM/2009 THE SOFOT ICE-CREAM CO. PVT. LTD. 6 13. IN THIS APPEAL VARIOUS GROUNDS HAVE BEEN TAKEN BUT AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT BASICALLY TWO DISPUTES ARE INVOLVED WHICH ARE AS UNDER: (I) CONFIRMATION OF ADDITION OF ACCOUNT OF SALES AMOUNTING 3 20 823/- AND RS. 10 60 389/-; (II) CONFIRMATION OF ADDITION ION ACCOUNT OF DIFFE RENCE IN GROSS PROFIT AMOUNTING TO RS.2 64 502/-. 14. AFTER HEARING BOTH THE PARTIES WE FIND THAT DU RING THE SEARCH OPERATIONS CERTAIN DOCUMENTS WERE FOUND. ON THE BASIS OF CONS UMPTION RECORD IT WAS NOTICED SALES WERE NOT PROPERLY RECORDED IN THE CASE OF COL ABA AND BREACH CANDY PARLOURS. THE A.O. OBSERVED THAT THERE WAS NO INCREASE IN SAL ES PATTERN IN THE MONTH OF APRIL MAY AND JUNE WHICH ARE SUMMER MONTHS AND AC CORDING FOR SUMMER MONTHS THE SALES WERE ESTIMATED AT HIGH FIGURES AS PER THE FOLLOWING PARA : SINCE THERE WAS NO CO-RELATION BETWEEN THE FIGURES RECORDED IN THE BOOKS OF ACCOUNTS AND THAT AVAILABLE IN THE SEIZED DOCUME NTS. ALSO SINCE THE ASSESSEE HAD NOT ATTEMPTED TO RECONCILE THE DIFFERE NCE THE BOOKS OF ACCOUNTS WERE REJECTED U/S.145(2) AS THE SALES OF B REACH CANDY AND COLABA PARLOURS HAD NOT BEEN RECORDED CORRECTLY AND SALES WERE TO BE ESTIMATED IN RESPECT OF THESE TWO PARLOURS. THE A.O. FURTHER OBS ERVED THAT THE SALES FIGURES FURNISHED BY THE ASSESSEE DID NOT SHOW ANY INCREASE DURING THE SUMMER MONTHS WHEN SALES OF ICE CREAM ARE LIKELY TO INCREASE. ALSO THE PATTERN OF SALES RECORDED IN THE BOOKS DID NOT SHOW ANY PERCEPTIBLE INCREASE IN SUMMER AND THAT IT WAS LIKELY TO REGIST ER AN INCREASE DEPENDING ON LOCATION OF VARIOUS PARLOURS LIKE BREACH CANDY. SINCE THE SALES FOR APRIL 03 AS PER THE SEIZED DOCUMENTS A-3 WERE RS.3 37 061 /- INDICATING DAILY SALES OF RS. 11 000/- (APPROX). BASED ON THIS THE S ALES PER DAY DURING THE SUMMER MONTH OF MARCH APRIL AND MAY WAS ESTIMATED AT RS. 15 000/- AND ACCORDINGLY SALES FOR MARCH APRIL AND MAY WAS DETE RMINED AT RS. 1 65 000/- RS.15 000/- AND RS.1 65 000/- RESPECTIV ELY. WHILE THE SALES PER DAY FOR OTHER MONTHS WERE ESTIMATED AT RS. 12 0 00/- BASED ON THE FIGURE OF SALES RECORDED FOR THE MONTH OF JANUARY 0 4. ACCORDINGLY THE FIGURES OF THE SALE FOR BREACH CANDY WAS TAKEN AT R S.46 56 000/- AS AGAINST THE FIGURES OF RS.35 95 611/-. THE DIFFERENCE OF RS . 10 60 389/- WAS ADDED AS UNACCOUNTED SALES. 15. SALES FOR COLABA BRANCH WAS ESTIMATED AS UNDER: AS REGARDS COLABA PARLOUR SINCE THESE WERE DISCREP ANCIES IN THE FIGURE OF SALE RECORDED IN THE BOOKS OF ACCOUNTS AND FIGURE I N THE SEIZED MATERIAL THE A.O. ESTIMATED THE SALES AT RS.1500/- PER DAY THER EBY FIGURE OF SALE WAS DETERMINED AT RS.5 02 500/- AS AGAINST RS. 1 81 677 /- AND THE DIFFERENCE OF RS. 3 20 823/- WAS ADDED. 16. ON APPEAL THE ADDITION WAS CONFIRMED BY THE L EARNED CIT(A). I.T.A.NOS.2837 & 2838/MUM/2009 THE SOFOT ICE-CREAM CO. PVT. LTD. 7 17. BEFORE US SIMILAR ARGUMENTS WERE MADE. 18. AFTER CONSIDERING THE RIVAL SUBMISSIONS CAREFUL LY WE FIND FORCE IN THE SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE T HAT ASSESSING OFFICER HAS NO BASIS TO ESTIMATE THE SALES. THE DETAILS OF DIFFERE NCE WHICH WERE FOUIND ONLY IN THE CASE OF SNOWMAN PARLOUR (BREACH CANDY PARLOUR) ARE AS UNDER: MONTH SALE AS PER BOOKS SALE RECORDED IN SEIZED MATERIAL A-3 DIFFERENCE APRIL 92 328 448 337 061 (8 613) MAY 92 402 252 391 103 11 149 JUNE 92 328 547 358 073 (29 526) JULY 92 283 366 269 129 14 237 AUG.92 236 460 286 359 (49 899) SEPT.92 313 942 230 265 83 677 OCT.92 203 936 N.A. N.A. NOV. 92 261 494 N.A. N.A. DEC. 92 326 879 N.A. N.A. JAN. 93 384 249 N.A. N.A. FEB. 93 211 769 N.A. N.A. MAR. 93 314 269 N.A. N.A. TOTAL 3 595 611 21 025 THE ABOVE CLEARLY SHOWS THAT DIFFERENCE IS NEGLIGIB LE AT RS. 21 025/-. MOREOVER IN TWO MONTHS I.E. IN MAY AND JULY 1992 SALES RECORDE D IN THE BOOKS WAS MORE THAN THE FIGURE OF SALE AND WERE FOUND IN THE SEIZED MAT ERIALS. THEREFORE THIS INCREASE IS NOT AUTHENTIC AND DIFFERENCE IS ALSO NEGLIGIBLE. THEREFORE FOLLOWING OUR ORDER FOR THE ASSESSMENT YEAR 1993-94 WE DELETE THE ADDITION ON ACCOUNT OF SALES. 19. AFTER HEARING BOTH THE PARTIES WE FIND THAT TH E ASSESSEE HAD SHOWN GROSS PROFIT OF 46.83 PER CENT AND SINCE CONSUMPTION RECO RDS WERE NOT AVAILABLE THE GROSS PROFIT WAS ESTIMATED BY THE ASSESSING OFFICER BY ASSESSING OFFICER AT 53% AND MADE AN ADDITION OF RS. 2 64 502/-. 20. ON APPEAL THE ACTION OF THE ASSESSING OFFICER CONFIRMED BY THE LEARNED CIT(A). 21. BEFORE US IT WAS MAINLY SUBMITTED THAT MANY ING REDIENTS ARE INVOLVED AND VARIETY OF TOPPINGS CROSSES 100 AND THEREFORE IT IS NOT POSSIBLE TO MAINTAIN THE I.T.A.NOS.2837 & 2838/MUM/2009 THE SOFOT ICE-CREAM CO. PVT. LTD. 8 DETAILED CONSUMPTION RECORD FOR EVERY ITEM. THE OV ER ALL CONSUMPTION RATIO OF RAW MATERIAL AND THE DETAILS OF PURCHASES OF MORE THAN RS. 20 000 WERE DULY FURNISHED BY BEFORE THE ASSESSING OFFICER AND FURTHER NO DEFE CTS HAVE BEEN FOUND BY THE ASSESSING OFFICER IN THE BOOKS OF ACCOUNT. HE ALSO SUBMITTED THAT KWALITY FROZEN FOODS LTD. HAS SHOWN A PROFIT OF RS. 45.78%. HE AL SO ARGUED THAT THERE IS A CONTINUOUS COMPETITION AND GROSS PROFIT IS GOING DO WN IN ALL THE YEARS BECAUSE THE ASSESSEE HAS TO MAINTAIN ITS SALES. LASTLY HE POIN TED OUT THAT RAW MATERIAL COST PARTICULARLY THAT OF MILK HAS BEEN STEADLY GOING UP ALL THE YEARS AND THE SAME HAS LEAD TO FALL IN THE GROSS PROFIT RATE. 22. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT THE TRIBUNAL ITSELF HAD CONFIRMED THE GROSS PR OFIT RATE OF 61% IN THE ASSESSMENT YEAR 1992-93 AND THEREFORE THE A.O. WAS JUSTIFIED IN ESTIMATING THE PROFIT AT 53%. 23. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. WE FIND SOME FORCE IN THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSES SEE THAT PROFIT MAY FALL BECAUSE OF INCREASE IN COMPETITION AS WELL AS RISIN G COST OF RAW MATERIAL. HOWEVER SINCE FULL DETAILS COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER AND THERE IS A DRASTIC FALL IN G.P. RATE AND THEREFORE CONSIDERIN G THE OVER ALL FACTS WE ARE OF THE VIEW THAT IT WOULD MEET THE ENDS OF JUSTICE IF GRO SS PROFIT RATE IS ESTIMATED AT 49%. THEREFORE WE SET ASIDE THE ORDER OF THE LEARN ED CIT(A) AND DIRECT THE A.O. TO ADOPT G.P. RATE OF 49%. 24. IN THE RESULT THE ASSESSEES APPEAL FOR THE AS SESSMENT YEAR 1993-94 (ITA NO. 2837/M/200) IS ALLOWED WHILE THE APPEAL FOR THE ASSESSMENT YEAR 1994-95 (ITA NO. 2838/M/2009) IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 31ST DAY OF MARCH 2010. SD. SD. (N.V. VASUDEEVAN) (T. R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED THE 31 ST MARCH 2010. I.T.A.NOS.2837 & 2838/MUM/2009 THE SOFOT ICE-CREAM CO. PVT. LTD. 9 KN COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT-VII MUMBAI 4. THE CIT(A)-VII MUMBAI 5. THE DR E BENCH MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR ITAT MUMBAI I.T.A.NOS.2837 & 2838/MUM/2009 THE SOFOT ICE-CREAM CO. PVT. LTD. 10