2016 (7) TMI 1100

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.... 31.03.2014 for the assessment year 2010-11. The Commissioner of Income Tax (CIT) in exercise of the powers under Section 263 of the Income Tax Act, 1961 (for short 'the Act') cancelled the assessment framed by the Assessing Officer and directed him to make a fresh assessment. The appellant has raised the following questions of law:- i) Whether in the facts and circumstances of the case, the order of Hon'ble ITAT is perverse in law in quashing the order under section 263 ignoring the decision of Hon'ble Punjab and Haryana High Court in case of CIT v. M/s Abhishek Industries Limited, ITA No. 312 of 2011 dated 20.12.2012 and CIT v. Assam Tea House 344 ITR 507 (O&H) wherein in the similar circumstances, Hon'ble Court has upheld the in....

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....ding recording the statements of the persons concerned and had accepted the low G.P. rate taken by the respondent. It was also held that the net profit rates were very low even in the previous assessment years namely 2008-09 and 2009-10. In the assessment year 2010-11 the G.P. rate was only 10.85%. Further if the amount surrendered was excluded there would be a loss. It was further held that the Assessing officer had failed to ascertain whether the G.P. rate shown by the assessee was appropriate keeping in view the nature of the business. It was further observed that the Assessing Officer could have gathered the necessary data by recording the statements of the employees who actually manufactured the products, namely, sweets, by gathering d....

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....at the assessee continued with the same business which in the earlier years had not been doubted. It is difficult to hold as perverse or unreasonable the Tribunal's acceptance of the respondent's explanation for the fall in the G.P. The reason furnished was that in the earlier year the purchase price of the items used in manufacturing the products was lower and in the year under consideration the purchase prices had increased. This is especially so in view of the fact that the respondent had furnished the data of the same before the Assessing Officer. Further, as noted by the Tribunal, the objections raised by the CIT had been met by the assessee before the Assessing Officer at the stage of assessment. 5. It is evident, therefore, that n....

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.... no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and- (i) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year ; 8. It was contended that the respondent had not established that the profits and gains in the year in question were on account of any business or profession carried on by it. The contention is well founded. The record does not indicate that the respondent had indicated the source of income. 9. Mr. Bhan's reliance upon the order of the C.I.T. under section 263 of the Act is of no assistance. The respondent had surrend....