COMMISSIONER OF INCOME TAX-II, CHANDIGARH V. GURINDER PAL SINGH

ITA/18/2012

AI Insights

The case involves an appeal by the Commissioner of Income Tax-II, Chandigarh against Gurinder Pal Singh concerning the adoption of a net profit rate for the assessment year 2007-08. The Revenue challenged the Tribunal's decision which had lowered the net profit rate from 12% (adopted by the assessing officer) to 7% (as ruled by the CIT(A)). The Tribunal's decision was based on the precedent set in the assessee's earlier years (2005-06 and 2006-07) where a net profit rate of 8% was applied. The Revenue's appeal was dismissed by the High Court of Punjab and Haryana, which found no substantial question of law and affirmed the Tribunal's decision.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 734333 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 25-03-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: URVASHI DHUGGA
• Keywords: Assessment Year; Commissioner of Income Tax (Appeals); Income Tax; Income tax appellate tribunal; Net profit rate
• Section: 260-A

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITANo.18 of 2012(O&M) Date of decision: 25.03.2013 Commissioner of Income Tax-II, Chandigarh .... Appellant Versus Gurinder Pal Singh .... Respondent CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MRS. JUSTICE RITU BAHRI Present: Ms. Urvashi Dhugga, Advocate for the appellant. ***** HEMANT GUPTA, J. (ORAL) The present appeal filed under Section 260-A of the Income Tax Act, 1961 is arising out of an order dated 28.04.2011 passed by Income Tax Appellate Tribunal, Chandigarh (for short “the Tribunal”) pertaining to the year 2007-08. The Revenue has claimed the following question of law: “ i) Whether on the facts and circumstances of the case, the Hon'ble Tribunal was right in law in allowing an adoption of Net Profit rate of 7% as ruled by the CIT(A) in contrast to the Net profit rate of 12% adopted by the assessing officer, without appreciating the fact that the assessee is not maintaining books of accounts with relevant bills/vouchers; ii) Whether on the facts and in the circumstances of the Hon'ble ITAT was right in law to have upheld the net profit rate applied in the earlier year in the assessee's case without appreciating the fact that the principle of res judicata is not applicable to income tax proceedings each year being a separate year; iii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in upholding the order of the CIT(A) without appreciating the speaking order of the Assessing Officer wherein he had highlighted the specific facts / discrepancies of the Assessment Year ITANo.18 of 2012(O&M) -2- 2007-08 in contrast to the earlier years, which made him adopt the net profit rate of 12%. Hence, the order of the ITAT is arbitrary and perverse.” Learned Tribunal has dismissed the appeal filed by the Revenue for the reason that net profit rate of 8% was applied in the case of assessee in the year 2005-06 and 2006-07, therefore, in the present assessment year, the Tribunal found no reason to interfere with the order passed by the Commissioner of Income-Tax (Appeals). The Tribunal further clarified that this order will not operate as precedent if the assessing officer is in a position to bring sufficient materials on record warranting adoption of higher percentage of net profit or higher amount of disallowance of expenses. We heard learned counsel for the appellant and find no merit in the appeal. As a matter of fact, for the assessment year 2005-06 and 2006-07, this Court has dismissed the revenue's appeal bearing ITS Nos.260 and 261 of 2011 on 13.09.2011. A perusal of the order of this Court shows that in the year 2001-02, 2002-03,2003-04 and 2004-05, the net profit rate of 7% was applied. Though for the years in question, 8% of net profit rate was applied. What should be the net profit rate is question of fact in each case. The Tribunal has applied net profit rate of 8% in view of such rate applied in earlier years. Therefore, we do not find that any substantial question of law arises for consideration in the present appeal. Dismissed. (Hemant Gupta) Judge 25.03.2013 (Ritu Bahri) sonia/Vimal Judge "