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TMI Blog2008 (4) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... ring and sale of Bidi with trademark as Nisar Biri Sikka No. 1. 3. For the assessment year 1993-94, the assessee had filed return showing income of Rs. 15,314. The disclosed sale of Bidi was at Rs. 75,18,825 and the gross profit rate was shown at Rs. 4,62,635 and the percentage of gross profit was 6.15 per cent. The Assessing Authority has accepted the sale figure but rejected the books of account after applying the provisions of section 145(1) of the Act and applied gross profit rate of 10.5 per cent, which was applied in the assessment year 1992-93 and made an addition towards extra profit at Rs. 3,27,490 The Commissioner of Income-tax (Appeals) allowed the appeal in part and reduced the gross profit rate by 1 per cent. 4. Being aggriev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that since the payments were not verifiable, therefore, the provisions of section 145(1) of the Act is applicable. He further submitted that in the case of M/s. A.M. Mazdoor Biri Co. involved in the manufacturing of Biri higher gross profit rate had been applied while in the case of assessee gross profit rate at 8.5 per cent has been applied. 7. Having heard learned counsel for the parties we have gone through the impugned order and the order of the authorities below. 8. We are of the opinion that the rejection of books of account is not justified and based on irrelevant consideration. It is not in dispute that in the manufacturing of Biri there is involvement of labourers. The labourers are normally illiterate, as observed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al for the assessment year 1992-93 the case cannot be reopened in the absence of any specific material for escapement of income. Before the Tribunal the assessee has specifically raised the arguments in this regard, which is mentioned in para 14 of the Tribunal's order. The perusal of the Tribunal order reveals that such plea has not been adjudicated. 11. In these circumstances, we are of the view that the order of Tribunal is vitiated and liable to be set aside. The case is remanded back to the Tribunal to decide the appeal afresh and adjudicate the fundamental question namely, "Whether on the facts and circumstances of the case, the reopening of the case for the assessment year 1994-95 was justified?" 12. In the result, both the appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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