9911796707
TMI Blog2011 (4) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998 to 19th August, 1998 dismissing the appeal preferred by the assessee. Being dissatisfied, the assessee has come up with the present appeal. The facts giving rise to filing of this appeal may be summed up thus: a) The assessee is a manufacturer of cement in his mini-cement plant in the District of Hazaribagh, Bihar. b) There was a search in the factory and some papers were found in Varanasi, at the residence of one of its Director, namely, Anil Agarwal. While deposing before A.D.I. (Investigation) Rachi, one G.C. Agarwal, another Director of the Company with a view to buying peace, declared a sum of Rs.7.50 lac and further declared an estimated G.P. of 7%. The controversy arose when the Assessing Officer estimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Authority was of the view that gross profit rate should be estimated at 8.5% as reasonable gross profit rate on the basis of which the undisclosed income for the relevant block period should be computed. e) Being dissatisfied, the assessee preferred an appeal before the learned Tribunal below and by the order impugned herein the Tribunal has affirmed the order passed by the Commissioner of Income-tax (Appeals). Being dissatisfied, the assessee has come up with the present appeal. A Division Bench of this Court at the time of admission of the appeal formulated the following substantial questions of law: "i) Whether on the facts and in the circumstances of the case when it was an admitted fact that the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough a comparative chart showing gross profit rate in the business of cement manufacturing earned by different business concerns was produced by the appellant both before the Assessing Officer and the first Appellate Authority, the Assessing Officer without any basis arrived at the conclusion that rate should be assessed at 10% without giving any reason for such estimate. It appears that the Commissioner of Income-tax (Appeals) came to the finding that there was no basis of the estimation of the Assessing Officer. Nevertheless, he himself arrived at the figure of 8.5% equally without any basis and the Tribunal below also affirmed such finding without giving any reason but merely on conjecture. In our view, when the assessee has given a comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is perverse and is based on no evidence, it can be set aside in appeal even though the appeal is permissible only on substantial question of law. The perversity of the finding itself becomes a substantial question of law (Kulwant Kaur vs. Gurdial Singh Mann, AIR 2001 SC 1273). We, therefore, set aside the order passed by the authorities below and send the matter back to the Assessing Officer for considering the comparative profit rate of various business organizations supplied by the appellant and to arrive at a conclusion as regards the gross profit rate after taking into consideration those materials and after giving reason in support of his conclusion. Let such assessment be made positively within two months from the date of com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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