2011 (9) TMI 1200 - HC - Income Tax

Summary

Issues involved: Appeal against Income Tax Appellate Tribunal's judgement on addition of amounts u/s suppression of sale and low GP rate, validity of findings and conclusions, and evidence on record.

Suppression of sale and low GP rate: The Revenue appealed against the Tribunal's decision to delete additions of amounts due to suppression of sale and low GP rate. The Tribunal found that the accounts were available, sales were recorded in regular books, and the stock quantities tallied with the original return and tax audit report. The Tribunal directed the computation of profit based on the books of accounts, leading to the deletion of the addition made on account of low GP. The High Court concluded that the reason for rejecting the books of accounts was not valid, and therefore dismissed the appeal as no substantial question of law arose.

Validity of findings and conclusions: The Tribunal reversed the findings of the Assessing Officer and the Appellate Commissioner without providing cogent and relevant reasons. However, the Tribunal's decision was based on the availability of accounts and proper recording of sales in the regular books. The High Court observed that the Tribunal's direction to compute profit based on the books of accounts was justified, leading to the deletion of the addition on account of low GP. Consequently, the High Court dismissed the appeal as no substantial question of law was found to arise.

Evidence on record: The Tribunal's decision to compute profit based on the books of accounts was supported by the availability of accounts and proper recording of sales. The High Court noted that the sales were duly recorded in the regular books of accounts, and the stock quantities matched the original return and tax audit report. As a result, the High Court upheld the Tribunal's decision and dismissed the appeal, as no substantial question of law was identified in the case.