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TMI Blog2008 (3) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... Rakesh Kumar Garg, JJ. JUDGNENT The judgment of the court was delivered by Rakesh Kumar Garg, J. - This judgment shall dispose of ITA Nos.496/2005, and 557/2005 as the common question of law on similar facts arises in all these appeals. However, the facts are taken from ITA No.496 of 2005. The Revenue has filed the present Appeal under Section 260A of the Income Tax Act, 1961(for short 'the Act') against the order of the Income Tax Appellate Tribunal, Chandigarh , Bench 'A' Chandigarh (for short 'the Tribunal'), dated 30.5.2005 passed in ITA No.718/CHANDI/2001 for the Assessment Year 1997-98 raising the following substantial question of law: - "Whether on the facts and in the circumstances of the case and in law, the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as made by taking the food cost ratio at 45 % on account of suppressed sales. It is relevant to mention that before arriving at the above conclusion, the Assessing Officer also sought information from CITCO about average cost of some of the dishes and average cost of food, liquor, vis a vis sales norms accepted in hotel, which according to them in the case of hotel Shivalik View was 29.85 %. Being aggrieved against the assessment , the assessee filed an appeal before the Commissioner of Income Tax(Appeals). It was contended by the assessee that sales were fully vouched, no specific defects were found in the books of accounts maintained by the assessee and therefore, the Assessing Officer was not justified in enhancing sales on mere presump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation. The status of the two hotels differ. The appellant has a very small hotel and it does not have infrastructure of CITCO, hence comparison between the two business is unfair. The CITCO is running a hotel which is a star hotel and is posh and the charges are very high. Further the CITCO hotels have advantage of economics of scale, whereas the appellant is running a restaurant on a very small scale with only 12 tables. The ambiance which is offered by CITCO hotel is different from the appellant hotel and the customer is prepared to pay high price for good ambiance. The CITCO hotel is patronized by elite and the rich people of the town, whereas the appellant's hotel is patronized by ordinary people. Therefore, there cannot be any c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer has based its order on the basis of results of 16 hotels/restaurants. On the other hand learned counsel for the assessee has argued that in the facts and circumstances of the case, some element of estimate was unavoidable and in the appellate jurisdiction, the court normally does not interfere by substituting its own estimate in place of the one of the Tribunal unless it is shown that the estimate of the Tribunal could not possibly be reached. Learned counsel for the assessee has relied upon a judgment of this Court in the case of Ved Parkash Versus Commissioner of Income Tax 265 ITA 642 in support of his contentions. We have heard learned counsel for the parties and have perused the order of the Tribunal. We are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e charges are very high. Further the CITCO hotels have advantage of economics of scale. The ambience which is offered by CITCO Hotel is different from the appellant hotel and the customer is prepared to pay high price for good ambience. The CITCO hotel is patronized by elite and the rich people of the town, whereas the appellant's hotel is patronized by ordinary people. Therefore, there cannot be any comparison between the trading results of the two type of hotels. The Revenue has not in fact challenged these findings before the Tribunal. No doubt, in such cases some element of estimate is unavoidable. However, this is a well settled that in the appellate jurisdiction under Section 260-A of the Act, this Court normally does not interfere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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