MAHAKOSHAL POTTERIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Heard. This appeal was admitted on May 1, 2001, on the following substantial question of law:

(2.) The facts of the case are that the appellant had filed its return for the assessment year 1994-95 on the basis of account books maintained by the appellant. The Assessing Officer, while passing assessment order dated December 29, 1995, had recorded a finding that wrong method was applied by the appellant for calculating the gross profit and net profit. The Assessing Officer, while recording such finding, had compared the various datas furnished for the assessment years 1993-94 and 1994-95 and without giving specific finding in respect of account books, the Assessing Officer in paragraph 2(f) of the order had invoked the provisions of section 145(1) of the Income-tax Act, 1961, and the ratio of the profit which was shown by the appellant at the rate of 19.9 per cent, was enhanced to 21.66 per cent.

(3.) Learned counsel for the appellant submitted that though the Assessing Officer had invoked the provisions as contained in section 145(1) of the Income-tax Act, 1961, for rejecting the account books of the appellant but without assigning any reason, rather specific reason in the impugned order. The figures taken into consideration by the Assessing Officer were also not correct. The appellant herein had placed the correct figures before the Commissioner of Income-tax (Appeals) (CIT(A)), Jabalpur, in the memo of appeal, during the course of arguments on March 20, 1998, but the aforesaid figures were not taken into consideration by the Commissioner of Income-tax (Appeals). By the impugned order annexure A/4 dated March 27, 1998, the Commissioner of Income-tax (Appeals) though had affirmed the order of the Assessing Officer (AO) but in a very cryptic manner without considering the grounds and the objection raised by the appellant in the memo of appeal and also in the written arguments. The Income-tax Appellate Tribunal (ITAT) has also not considered the ground raised by the appellant for rejecting the account books.