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TMI Blog2013 (7) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... ast history as the relevant basis for assessment, proceeded to retain a part of the addition without cogent and sufficient reason therefor. The Tribunal, therefore, while endorsing the basis adopted by the CIT(A), has found no reason to sustain any addition and hence, deleted the addition altogether - Tribunal cannot be faulted in accepting the profit rate as declared by the assessee while not approving the rate as applied by the AO -Following decision of Commissioner of Income Tax Vs. Sadrudeen Hussaion [2001 (7) TMI 11 - RAJASTHAN High Court] and Ram Prakash v. CIT [1983 (9) TMI 262 - ALLAHABAD HIGH COUR] - Decided against Revenue. - D.B. IT APPEAL NO.145 of 2006 - - - Dated:- 15-1-2013 - DINESH MAHESHWARI AND ARUN BHANSALI, JJ. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1991-1992, the income of the assessee was assessed at Rs.4,15,32,865/- as against the declared profit of Rs.3,87,66,937/- by adopting a net profit rate of 20.5% towards the total outgoings (total payment made to Government for lifting goods) as against the declared rate of 19.13% after rejecting the books of accounts of the assessee, under Section 145 of the Act. The profit rate was adopted by the AO by taking into account the comparable case of one M/s Malu Khan Party, Bikaner. Feeling aggrieved, the assessee preferred an appeal before the CIT(A), which was partly allowed by the order dated 28.01.1998. The CIT(A) though upheld the order of the AO for applying the provisions of Section 145(2) as the sales of the assessee were not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le price than recorded. The AO has rejected the books of the accounts but, has relied totally on the figures recorded herein except the 'sales' and for that reason has concluded that the assessee may have earned more profits. But the AO cannot be given a very long rope for estimation purposes. It is to be guide judiciously. He cannot be allowed to act in an arbitrary manner. That is why in such cases where, only 'sales prices' are doubted, the accepted past history or the comparable case have been accepted as best guide. 12. The charts reproduced hereinabove are not disputed by Ld. DR. These charts were also available before the AO. From all the angles, be it gross profit on sales, net profit on sales or net profit on outgoings, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imate the profit by comparing it with the case of an assessee in identical line of business and if, as per the findings given by the Tribunal, the assessee's own history be made the basis for estimation of profits, then a particular assessee who has never been subjected to scrutiny assessment and who had been showing the gross profit at its own sweet will, would be in a advantageous position and the principle laid down by the Tribunal regarding precedence of past history over comparable cases would be against the basic cannons of taxation. No one has appeared on behalf of the assessee despite notice. After having heard the learned counsel for the appellant and having perused the material placed on record, we are unable to find any infir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions of the assessee that the case of M/s Malu Khan Party, Bikaner was not comparable or identical as the said M/s Malu Khan Party operated in an area which was 250 kms. away from that of the operational area of the appellant, came to the conclusion that the AO was not justified in making addition by comparing the results of the asessee with those of M/s Malu Khan Party, Bikaner, as the facts of the two case were altogether different. The CIT(A) thus, held that the addition made by the AO was excessive and unreasonable; and the profit declared by the appellant was quite fair and reasonable; and hence, reduced the addition by Rs.17,00,000/-. In Ram Prakash v. CIT (1983) 15 Taxman 533, the Hon'ble Allahabad High Court, while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 677, this Court while considering a case of another liquor contractor upheld the order passed by the Tribunal which relied on the assessee's own case in the immediate preceding year and the appeal filed by the Revenue was dismissed. The findings of the Tribunal reproduced herein-above make it clear that the Tribunal has examined the issue involved in its correct prospective and has assigned cogent reasons for not approving the order passed by the AO. The AO was obviously in error in taking the case of M/s Malu Khan Party as a comparable one for the reasons given by CIT(A) and in the face of assessee's available and consistent past history. In our view, ultimately, the matter had been of putting a estimate on the profit of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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