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TMI Blog2005 (7) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh (for short, "the Tribunal") in I.T.A. Nos. 396/Chandi/96 and 474/Chandi/96, pertaining to the assessment year 1992-93. According to the assessee, the said orders involve the following substantial questions of law: "(i) Whether under the facts and circumstances of the case the Tribunal was justified in law in upholding the applicability of the provisions of section 145(2) without finding any material or evidence on record for rejection of books of account? (ii) Whether under the facts and circumstances of the case, the Tribunal's concurrence on the rejection of books of account with the Commissioner of Income-tax (Appeals) is without any basis and hence making estimation is perv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had been effecting sales outside the books of account. On January 23, 1993, the Central Enforcement Wing of the Excise and Taxation Department, Patiala, inspected the office premises of the assessee and seized certain documents. The same revealed unaccounted sales of vanaspati ghee amounting to Rs. 5 lakhs and soap amounting to Rs. 40,000 during the previous year, relevant to the assessment year 1992-93. In the light of the past history of the assessee and in view of the excessive consumption of nickel catalyst and electricity coupled with low gross profit (GP) and low yield, the Assessing Officer came to the conclusion that the books of account maintained by the assessee were not correct and were liable to be rejected. The Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cylinder, the assessee would not like to waste it, he estimated the ratio of production of oxygen gas vis-a-vis ghee per metric ton at 1:3 and thus, came to the conclusion that the assessee had suppressed sales of oxygen gas amounting to Rs. 6,73,326. Aggrieved, the assessee challenged the assessment order in appeal before the Commissioner of Income-tax (Appeals) (for short, "the Commissioner (Appeals)"). It was pleaded before the Commissioner (Appeals) that since no defects had been pointed out by the Assessing Officer in the books of account maintained by the assessee and all purchases and sales were fully vouched and in the books of account, there was no occasion for the Assessing Officer to invoke section 145(2) of the Act. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther appeals to the Tribunal. Taking note of the inspection carried out by the Excise and Taxation Department, the Tribunal came to the conclusion that the books of account were rightly rejected by the Assessing Officer. However, on the question of estimation of income after rejection of books of account, the Tribunal observed that the basis adopted by the Assessing Officer, namely, averaging of sales on the basis of four bills, which contained specific details of the unaccounted sales aggregating to Rs. 4,99,386, may not be a correct estimation of income because no such specific details were found recorded in the remaining vouchers. Nevertheless, the Tribunal felt that adoption of trading results for the assessment year 1991-92 by the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sales. In a nutshell, the plea is that on the facts of the present case, there was no evidence on record to show that the assessee had suppressed its sales and therefore, a question of law does arise from the impugned orders. We are unable to agree with learned counsel. It needs little emphasis that the scope of appeal under the newly inserted section 260A of the Act is restricted to adjudication on a substantial question of law and not on a question of law. Though the expression "substantial question of law" is not defined in the Act or any other statute, where a similar expression appears, it has acquired a definite connotation through a catena of judicial pronouncements. Recently in Santosh Hazari v. Purushottam Tiwari [2001] 251 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal copies of 53 invoices in a given situation may not per se lead to an inference that the accounts maintained by the assessee were false or incomplete. Nevertheless, the absence of original invoices coupled with the fact that the excise authorities did find some incriminating material during inspection, namely, four bills, which have not been disputed by the assessee, did lead to an inference that the accounts disclosed did not comprehend all the transactions and the assessee's projected trading results required deeper scrutiny. We are of the view that in the light of all this material, the authorities below were justified in rejecting the books of account of the assessee under section 145(2) of the Act and in making the assessment in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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