COMMISSIONER OF INCOME TAX Vs. CHADHA AUTOMOBILES (INDIA)

JUDGEMENT

(1.) Both these appeals pertain to same assessment year in respect of same assessee. Even the question of law raised is identical. It so happened that two appeals, one preferred by the Revenue and the other by the assessee, were decided by the tribunal on different occasions by passing two orders and that is the reason that two appeals are before us. ITA 660/2004 was admitted on 8th November, 2004. Since decision in the second appeal was rendered subsequently by the tribunal, the appellant filed ITA 730/2008 which was admitted on 26th October 2010. Identical question of law was framed while admitting the two appeals. This question of law is as under :

(2.) The aforesaid question has cropped up for consideration in the following factual backdrop.

(3.) By due date the assessee filed income tax return for the assessment year 2000-01 declaring an income of '20,30,048/-. During the assessment proceedings the assessee produced the account books. The Assessing Officer found various discrepancies therein and thus rejected those account books. In such a scenario, for the purpose of ascertaining the income of the assessee, the Assessing Officer undertook the exercise of finding the GP rate. The Assessing Officer took up case of one M/s Kohli & Co. which was trading in the same commodities. As per the AO, it was found that GP rate disclosed by the said M/s Kohli & Co. was 13.04%. As per the Assessing Officer since M/s Kohli & Co. was a comparable example, the GP rate declared by M/s Kohli & Co. was adopted as the basis of computation of the income of the assessee as well. Taking this GP rate of 13% on the trading results shown, trading addition of '33,06,687/- by the Assessing Officer was made and on this basis the assessment order was framed.