TaxTMI 
TaxTMI 
2003 (7) TMI 70
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....s said to be supported by the certificate issued by the competent authority of the Excise Department. As per P-5 certificate for the three groups, the profit worked out to Rs. 3,89,525. As observed in the assessment order the assessee did not maintain shop wise accounts and no cash memos were produced and, therefore, the sale price mentioned in P-5 certificate could not be subjected to verification. The expenses mentioned in P-5 certificate could not also be verified in the absence of shop wise books of account. The Assessing Officer observed that the certificates were on the basis of the information given by the assessee including sale price which was not fixed by the Excise authorities but taken as per details given by the assessee. It was held by the Assessing Officer that the proper stock records were not maintained and accounting for empty bottles was also not proper. The Assessing Officer invoked the provisions contained in the proviso to section 145(1) of the Act and estimated the profits as 2V2 times the licencing fee. Being dissatisfied with the order passed by the Assessing Officer the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The....
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....f 3 per cent. on the said estimated sales. By this method, the net profit of the appellant during the year is worked out at Rs. 14,40,000 (3 per cent. of Rs. 4.80 crores). The appellant shall therefore get a relief of Rs. 15,61,246 (30,01,246-14,40,000) during the year." Being dissatisfied, the assessee preferred an appeal before the Tribunal which in its order in paragraph 2 expressed the view as under: "2. During the course of arguments our attention was invited to the order of the Tribunal for the assessment years 1981-82 to 1984-85 in I.T.A. Nos. 966 and 967/Ind of 1988 in which an identical issue was examined by the Tribunal in an exhaustive manner. The said order of the Tribunal was followed by the Tribunal in the succeeding years, i.e., 1987-88 in I.T.A. No. 1/Ind of 1991. Since the Tribunal has taken a particular view in favour of the assessee in the earlier years, we find no reason to take a different view in the instant case. We, therefore, decide the appeal in favour of the assessee after following our earlier order and direct the Assessing Officer to accept the book results shown by the assessee." Ordinarily, we would not have reproduced the order passed by ....
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....counts by following a consistent method of accounts for the past several years and when the accounts maintained by following such methods were accepted on the earlier occasions, the Tribunal set aside such order and particularly the method of estimating the sales on the basis of licence fees and then applying the net profit rate. The Tribunal had found, as a matter of fact, that the book result on the basis of the books of account was well comparable with Form No. P-5 issued by the Excise authorities. It is contended that the orders of the Tribunal had attained finality as the same were not challenged by the Revenue in further proceeding. It is put forth that the Tribunal has followed its earlier decision in the assessee's own case on identical facts and circumstances and no substantial question of law can be said to have arisen. Various decisions have been referred to in the reply which we shall deal with while dealing with the submission of learned counsel for the parties. A reply has been filed by the appellant to the reply filed by the assessee. It is the stand of the Revenue in its reply that the decision of the Tribunal is flawed inasmuch as reliance has been placed on the....
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....nnot be said that there is a perversity of approach. It is urged by him that the colossal complaint made by the Revenue that the order of the Tribunal is a cryptic one has no legs to stand upon inasmuch as the Tribunal on many an earlier occasion dealt with similar issues and based its orders on sound and cogent reasons germane to the issue. It is contended by him that the consistency has to be maintained and when a particular method of accountancy, a recognised one, has been accepted by the Tribunal the same cannot be given a go-by as that would tantamount to paving the path of deviancy without any adequate justification. It is his proponement that the order passed by the Tribunal does not give rise to a substantial question of law as envisaged under section 260A of the Act and, therefore, this court should not interfere in exercise of its appellate jurisdiction as the interference in exercise of appellate jurisdiction is quite limited. At the time of admitting the appeal this court had framed the following questions of law: "(1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in allowing relief to the assess....
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.... Rehman [1994] 210 ITR 406, wherein the Bench while dealing with the concept of rejection of books of account held as under: "...that in the instant case, the account books were rejected because admittedly no stock register was maintained nor were the sales found verifiable in the absence of cash memo. The vouchers of expenses were also not forthcoming and the income returned was ridiculously low as compared to the exorbitant turnover and the extent of the business carried on by the assessee. Taking all these aspects and the material into consideration, the Tribunal had found as a fact that the claim of the assessee for acceptance of the account books was not sustainable. This was a finding of fact and no question of law arose from it" We have referred to the aforesaid two decisions cited by learned counsel for the appellant to show that under certain circumstances the books of account can be rejected. Mr. P.M. Choudhary, learned counsel, has cited a number of decisions to highlight that if in respect of earlier orders no appeal was preferred, the appeal preferred in respect of the subsequent year is liable to be dismissed. He has referred to the decision rendered in the c....
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....ethod or the market price method provided the method is followed in regard to both the opening stock and the closing stock. It is not open to him to adopt one method for valuing the opening stock and a different method for valuing the closing stock so as to intentionally suppress the income derived or derivable in the particular previous year. Even where an assessee has adopted a particular method for a period of years, there is no provision of law which prevents him from changing to any other method, provided the change-over is not made in the same assessment year." Reliance has also been placed on a Division Bench decision rendered in the case of CIT v. Guttoffnungashutto Sterkrado [1992] 197 ITR 66 (Orissa), wherein A. Pasayat J. (as his Lordship then was), expressing the opinion for the Bench held as under: "We have heard learned counsel for the Department. From the records, we find that a similar dispute, i.e., whether the income has to be assessed on 'complete contract' basis, was before the Tribunal for the assessment years 1965-66 and 1966-67. The Tribunal recorded a categorical finding that no defect in the accounts maintained by the assessee was pointed out by the A....
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....ribunal for the earlier assessment years in which similar relief was granted to the assessee. In the case of CIT v. Saddruddin Hussain [2003] 263 ITR 677 (Raj), the High Court of Rajasthan came to hold that when the assessee had produced the relevant books of account but had not produced the sale vouchers the Assessing Officer was not justified in invoking the provisions under section 145(2) of the Act. The heart of the matter is whether the Tribunal has erred in law by following its previous orders only by observing that it has dealt with the issue exhaustively is correct or that amounts to laconic expression of an order warranting interference of the appellate jurisdiction of this court under section 260A of the Act. To appreciate the factual scenario whether there is distinction in earlier years and in the present year learned counsel for the assessee has taken us through the orders passed by the Tribunal in I.T.A. Nos. 966 and 967/Ind of 1988 as well as I.T.A. No. 1/Ind of 1991. On a perusal of the first order passed in I.T.A. Nos. 966 and 967 of 1988 which relate to the assessment years 1981-82 and 1984-85, we find that the Tribunal had referred to the facts of the case tha....
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.... no reason to reject the book results. It was put forth that the assessee had to incur expenses more than as shown in the statement under the P-5 certificate was accepted in the earlier years, i.e., for the assessment year 1983-84. On an appeal being preferred the appellate authority set aside the order of the Assessing Officer and remitted the matter to him with certain directions. He had not enhanced the income nor any direction was issued to enhance the income. However, the Assessing Officer took the assessee's income for the purpose of receipts shown in the statement P-5 certificate resulting in an addition of Rs. 87,403. The Tribunal came to hold that though the jurisdiction of the first appellate authority is coterminous with that of the Assessing Officer and he can make enhancement and, therefore, the Assessing Officer could not have made addition higher than the addition made in the original assessment. Thereafter, the Tribunal dealt with the cost of bottles and came to hold that when no expenditure on account of purchase of the bottles has been claimed by the assessee, the assessee's explanation on the point appears to be reasonable. With regard to sealing charges the asse....
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....ring the course of assessment it was observed by the Assessing Officer that the assessee had not maintained any books of account for its 21 shops at various places and there was no document relating to the individual shops. In view of this the Assessing Officer invoked the jurisdiction under section 145(2) of the Act and asked the assessee to produce P-5 certificate for estimating his gross profit. Eventually, he determined the income of Rs. 6,02,650. An appeal was filed before the Commissioner of Income-tax (Appeals) and P-5 certificate was also produced. As per P-5 statement the assessee had suffered loss in respect of certain groups of shops as there was enhancement of licensing fee. The appellate authority did not accept the contention in toto but sustained the addition to the extent of Rs. 3,51,930. The Tribunal after considering the rival submissions advanced before it, in paragraph 6 held as under: "6. From a careful perusal of the record in the instant case we are unable to understand on what basis the Assessing Officer has estimated the sales at 21f2 times the licence fee and adopted a net profit at five per cent. of the same. Even the Commissioner of Income-tax (Appeal....
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....on on the Assessing Officer to reject the books of account. On a perusal of the assessment order we find that the Assessing Officer has catalogued similar grounds and rejected the books of account which were, in the earlier years, accepted by the Tribunal. The grounds enumerated by the Assessing Officer are that: (i) no books of account are maintained; (ii) the information has been submitted by the assessee to the Excise authorities and, therefore, the P-5 statement could not have been relied upon; (iii) separate stock registers have not been maintained. It is pertinent to state here that these facts were always in issue for a number of years and the Tribunal had decided the matter in favour of the assessee. The question that falls for adjudication is that in view of the obtaining factual matrix whether a substantial question of law does arise. We have already indicated earlier on that the Tribunal has altered the order by referring to its earlier judgments. Earlier judgments have been brought on record. We have referred to them in extenso. In this context we are of the considered view that it has been held in a series of decisions that the doctrine of res judicata is not applic....