The DCIT, Circle-9, Surat V. M/s. Bhadiyadra Gems, Surat

ITA 2454/AHD/2010

• Counselvise Citation: 245420514 RSA 2010
• Duration Of Justice: 5 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 05-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts; Opportunity of being heard; Question of law; Cost of acquisition; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD BEFORE S/SHRI PRAMOD KUMAR , AM AND S. S. GODARA, JM ITA NO. 2454 /AHD/201 0 ASST. YEAR 200 7 - 0 8 THE DY. COMMISSIONER OF INCOME - TAX, CIRCLE - 9, SURAT VS M/S BHADIYADRA GEMS, 9/10, SAVANI ESTATE , B/H. GITANJALI CINEMA, VARACHHA ROAD, SURAT (APPELLANT) (RESPONDENT) PA NO. A AAFB1561H APPELLANT BY SHRI KAMLESH MAKWANA , SR. D.R. RESPONDENT BY SHRI HARDIK VORA , A. R . DATE OF HEARING: 24 . 07 .2015 DATE OF PRONOUNCEMENT : 28 / 0 8/15 O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR A.Y. 200 7 - 0 8 ARISE S FROM ORDER DATED 1 7 - 05 - 2010 PASSED BY THE CIT(A) - V , SURAT, IN APPEAL NO.CA S - V / 249 /0 9 - 1 0 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, I N SHORT THE ACT. 2. REVENUES FIRST SUBSTANTIVE GROUND CHALLENGES CIT(A)S ORDER REVERSING THE ASSESSING OFFICERS ACTION IN REJECTING BOOKS OF ACCOUNTS. ITS CONTENTION IS THAT THE ASSESSEE HAD FAILED TO MAINTAIN QUALITY - WISE DATA OF DIAMOND MANUFACTURED AND TO FURNISH THE RELEVANT PRODUCTION RECORD. WE FIND THAT THE LOWER APPELLATE ORDER ON ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 2 THIS ISSUE COMPRISES OF ASSESSING OFFICERS OBSERVATIONS REJECTING BOOKS OF ACCOUNTS AND ASSESSEES SUBMISSION AS UNDER: 4. THE ASSESSEE FIRM IS ENGAGED IN THE BUS INESS OF MANUFACTURING OF DIAMOND FROM IMPORT OF ROUGH DIAMONDS AND SALE OF POLISHED DIAMONDS, BOTH IN THE LOCAL MARKET AND ALSO EXPORT MARKET. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON VERIFICATION OF BOOKS OF ACCOUNTS OF THE ASSESSEE FIRM, THE AO OBSERVED CERTAIN DEFICIENCIES IN THE MAINTENANCE OF BOOKS OF ACCOUNTS BY THE ASSESSEE AS DESCRIBED HEREUNDER. 4.1 THE AO OBSERVES THAT IT IS VERY RELEVANT TO MAINTAIN PIECE WISE QUANTITATIVE DATA IN THE STOCK REGISTER SO AS TO DETERMINE THE CORRECT ST ATE OF AFFAIRS OF THE BUSINESS. IT IS ALSO OBSERVED BY THE AO THAT SUCH DATA IS MENTIONED INVARIABLY IN THIS LINE OF BUSINESS IN EVERY BILL INCLUDING THOSE OF THE ASSESSEE AS WELL. FROM AN EXAMINATION OF THE STOCK REGISTER, FURNISHED IN THE FORM OF COMPUT ERIZED PRINT OUTS BY THE ASSESSEE, THE AO FURTHER OBSERVED THAT THE CRUCIAL ASPECT OF QUALITY DETAILS OF THE DIAMONDS MANUFACTURED HAS NOT BEEN INCORPORATED. HOWEVER, THE AO IS OF THE OPINION THAT THE MARKET VALUE OF POLISHED DIAMONDS BEING DEPENDENT ON TH E QUALITY PARAMETERS, SUCH AS CARAT, CUT, COLOUR AND CLARITY, IT IS ESSENTIAL THAT THE ASSESSEE MUST HAVE DETAILS OF ALL THE ABOVE PARAMETERS FOR EACH AND EVERY PIECE OF DIAMOND THAT IT MANUFACTURES. EVEN THOUGH THE ASSESSEE SUBMITTED THAT IT IS POSSIBLE T O IDENTIFY THE STOCK AND ALLOCATE COST TO THE SAME, THE' AO DID NOT ACCEPT THE CONTENTION AS THE FORMER HAS NOT MAINTAINED DETAILS OF CLOSING STOCK QUALITY WISE WHICH ACCORDING TO THE AO HAS A SIGNIFICANT BEARING ON THE BASIS OF VALUATION. 4.2 THUS, T HE AO CAME TO THE CONCLUSION THAT SUCH NON MAINTENANCE OF DETAILED QUALITATIVE RECORD OF THE CLOSING STOCK, PIECE WISE, BY THE ASSESSEE TANTAMOUNT TO NON MAINTENANCE OF BOOKS OF ACCOUNTS AND DOCUMENTS ON THE BASIS OF WHICH THE INCOME DECLARED IN THE RETUR N COULD BE ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 3 CORRECTLY ASCERTAINED AND THEREFORE PROCEEDED TO REJECT THE BOOKS OF ACCOUNT OF THE ASSESSEE U/S.!45(3) OF THE ACT. 4.3 IN SUPPORT OF SUCH ACTION, THE AO FURTHER RELIED ON THE DECLINE IN THE GROSS PROFIT RATIO OF THE ASSESSEE FIRM FROM 6% IN THE IMMEDIATELY PRECEDING YEAR TO 3.99% IN THE CURRENT YEAR AS BEING INDICATIVE OF THE UNDERVALUATION OF STOCK. THUS, THE AO REJECTED THE BASIS OF VALUATION OF CLOSING STOCK AND AS A RESULT THE BOOKS OF ACCOUNTS WERE ALSO REJECTED U/S. 145(3) AS BEING IMPE RFECT AND DEFECTIVE. 5. THE APPELLANT SUBMITS THAT PIECE WISE RE CORD DOES NOT HAVE MUCH IMPORTANCE AS FAR AS VALUATION OF CLOSING STOCK IS CONCERNED AS IS THE MARKET PRACTICE PREVALE NT. IT IS ALSO SUBMITTED THAT EVEN BUSINESS TRANSACTIONS AND THE DE ALINGS IN THE ST O C K TAKE PLACE ONLY ON THE BASIS OF CARAT AS A UNIT OF MEASUREMENT AND NOT PIECE WI SE. IN SUPPORT OF ITS CONTENTIONS, THE APPELLANT SUBMITS THAT IMPORT OF ROUGH DIAMON D IS ALWAYS QUANTIFIED ON CARAT BASIS, SALES PRICE OF POLISHED DIAMONDS A RE ALW AY S DECIDED IN TERMS OF CARAT AND NOT ON PIECE BASIS EVEN THOUGH AVERAGE NUMBER OF PIECES IS SHOWN IN THE RELEVANT BILLS, THE LABOUR PAYMENTS IS ALSO BASED ON THE CARATS OF DIAMONDS HANDLED AND THE DEALINGS OF JANGAD AND PACKETS OF DIAMOND IS ALSO DO NE IN CARATS. WITH RESPECT TO THE AVERAGE NUMBER OF PIECES SHOWN IN BI LLS, THE APPELLANT SUBMITS THAT THIS PERTAINS TO THE AVERAGE NUMBER AND NOT THE EX ACT NUMBER OF DIAMOND PIECES. ACCORDING TO THE APPELLANT, THE SAME IS MENTIONED O NLY FOR THE PURPOSES OF SAFETY, INSURANCE, CUSTOMS CLEARANCE AND IS INDICATIVE OF INFORMATIVE DATA RATHER THAN ACCURATE QUANTITATIVE BUSINESS MEASUREMENTS. THUS , IT IS CONTENDED THAT PIECE WISE DETAILS HAVE GOT NO RELEVANCE ON THIS ISSUE. 5.1 THE APPELLANT FURTHER SUBMITTED MA T THE IDENTITY OF THE ROUGH DIAMONDS ARE POSSIBLE ONLY TILL A PARTICULAR STAGE OF PRODUCTION AFTER WHICH THE INNUMERA BLE PIECES OF THE FINAL OUT PU T ARE MIXED AND THEN ASSORTED ON THE BASIS OF CE RTAIN PARAMETERS, AS DISCUSSED BY THE AO AS ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 4 WELL, BY QUALIFI ED PERSONS. IT IS FURTHER SUBMITTED THAT AT THE TIME OF SALES ALSO, THE RANGE OF WEIGHT OF STONES IN A LOT ARE NOT SIMILAR BUT MAY VARY MARGINALLY AND SAME IS THE CASE WITH THE QUALITY AS WELL. I T IS THE SUBMISSION OF THE APPELLANT THAT NO TWO STONES ARE E XACTLY THE SAME EVEN THOUGH THEY MIGHT HAVE COME FROM THE SAME SOURCE OF ROUGH DIAMOND AND CONSIDERING THE UNIQUE NATURE OF THE TRADE, THE INSISTENCE OF THE AO ON PRODUCT ION OF PIECE WISE QUALITATIVE RECORD IS QUITE AN IMPOSSIBLE DEMAND AND IS AGAINST THE A CCEPTED TRADE PRACTICES. 5.2 WITH RESPECT TO THE QUALITY WISE MAINTENANCE OF STOCK DETAILS, IT IS SUBMITTED THAT THE APPELLANT HAD REPEATEDLY FURNISHED THE BOOKS OF ACCOUNTS DISCLOSING THE SAME BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. THE CLO SING STOCK DETAILS CLEARLY SHOW LINKAGES OF NOT ONLY THE QUALITY BUT WEIGHT ALSO. IT IS ALSO SUBMITTED THAT THE VALUATION OF THE CLOSING STOCK OF FINISHED GOODS (POLISHED DIAMONDS) IS COMPLETELY SUPPORTED WITH EVIDENCES AND THEREFORE, THE DOUBTING OF VALUA TION OF CLOSING STOCK IN VIEW OF THE ISSUES RAISED BY THE AO IS NOT BASED ON FACTS. THE APPELLANT ALSO HAS RELIED UPON VARIOUS CASE LAWS IN SUPPORT OF ITS CONTENTION THAT BOOK REJECTION IS NOT TENABLE IN LAW AND ON FACTS IN ITS CASE. 5.3 IT IS FURTHER SUBMITTED BY THE APPELLANT THAT THE APPELLANT FIRM HAS BEEN CONSISTENTLY FOLLOWING THE SAME METHOD OF ACCOUNTING AND VALUATION OF CLOSING STOCK YEAR AFTER YEAR WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT IN THE EARLIER YEARS. IT IS FURTHER SUBMITTED THE BOO KS OF ACCOUNTS ARE SUBJECTED TO TAX AUDIT AND THAT THERE IS NO ADVERSE REMARK OR INFERENCE IN THE TAX AUDIT REPORT EITHER REGARDING THE RELIANCE PLACED BY THE AO OH THE DECLINE IN GP AS INDICATIVE OF UNDERVALUATION OF STOCK, THE APPELLANT SUBMITS THAT THE GP RATIO OF THE FIRM HAS NEVER BEEN CONSISTENT THROUGH THE YEARS AS IT DEPENDS ON MANY VARIABLES, INCLUDING THE VOLUME OF BUSINESS IN TERMS OF TURNOVER, QUALITY OF ROUGH DIAMONDS PURCHASE D, GENUINE VAGARIES OF BUSINESS IN TERMS OF SUPPLY AND DEMAND, PURCH ASE AND SAL E PRICE, ETC. ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 5 5.4 IT WAS FURTHER CONTENDED THAT THE AO WAS GUIDED BY CERTAIN FALLACIES OF GENERALIZED PRESUMPTIONS, SUSPICIONS AND CONJECTURES AS IS EVIDENT FROM H IS OBSERVATIONS IN THE ASSESSMENT ORDER THAT GP RATIO IS NOT AFFECTED BY VOLU ME A ND THAT GP RATIO SHOULD BE INTACT FROM YEAR TO YEAR IN A GIVEN BUSINESS WHICH IS A SWEEPING COMMENT. IT IS FURTHER SUBMITTED THAT THE AO'S OBSERVATIONS OF THE PRI CE AT WHICH THE APPELLANT FIRM HAS SOLD WAS LOWER THAN THE MARKET RATE WAS NOT SUPPORTED B Y THE AO WITH ANY EVIDENCE AND SO IS THE CASE WITH THE OT HER OBSERVATION THAT THE AVERAGE PURCHASE COST HAS ALSO DECREASED AND HENCE THE FALL I N SALE PRICE IS NEUTRALIZED. 5.5 IN AS MUCH AS THE VALUATION OF THE CLOSING STOCK IS CONCERNED, IT IS F URTHER SU BMITTED BY THE APPELLANT THAT EVEN IF IT IS TO BE CONSIDERED FOR THE SAKE OF ARGUMENT THAT THERE WAS ANY DIFFERENCE IN THE VALUATION OF CLOSING STOCK AS BEIN G PRESUMED BY THE AO, THEN SUCH DIFFERENCE IS AT BEST REVENUE NEUTRAL AND ANY SU CH ATTEMPT TO RECAS T THE P&L ACCOUNT BE REVALUATION OF STOCK ON THE BASIS OF PRESUMPTIONS AND CONJECTURES, IT WILL BE A FUTILE EXERCISE. 5.6 IT IS FURTHER CONTENDED BY THE APPELLANT THAT THE AO HAS UNILATERALLY REJECTED THE BOOKS OF ACCOUNTS ONLY AT THE TIME OF PASSING THE ASSESSMENT ORDER AND THAT NO OPPORTUNITY WAS GIVEN TO THE APPELLANT BY WAY OF ANY SHOW CAUSE AT ANY POINT OF TIME DURING THE ENTIRE ASSESSMENT PROCEEDINGS AND ON THIS COUNT ALSO THE ACTION OF THE AO IS UNTENABLE FOR THE BLATANT VIOLATION OF PRINCIPLES OF N ATURAL JUSTICE. IT IS THEREFORE, SUBMITTED BY THE APPELLANT THAT THE REJECTION OF BOOKS BY THE AO IS UNTENABLE, AND THE FOLLOWING DECISIONS AMONG OTHERS WERE RELIED UPON IN SUPP ORT THEREOF : (I) SUNDAR AGENCIES VS CIT (1997) 63 ITD 245 (ITAT, BOMBAY ) - A DDITION CANNOT BE BASED ON JEJUNE REASONING OR GUESS WORK ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 6 (II) INTERNATIONAL FOREST CO VS CIT 101 ITR 721 (J&K) BOOKS ACCOUNTS CANNOT BE REJECTED WITHOUT COGENT EVIDENCE (III) PANDIT BROS VS CIT (1954) 26 ITR 159 (PUNJ) - TO REJECT THE ACCOI T HERE MUST BE DEFINITE FINDINGS OF THE AO FOR WHICH THERE RNUSL DEFINITE MATERIAL (IV) CIT VS GOKALDAS HUKUMCHAND (1994) 11 ITR 462 (BOMBAY H C) - THE SUSPICION, HOWEVER STRONG, DO NOT TAKE THE PLACE OF EVIDENCE. (V) OMAR SALAY MOHAMED SAIL VS CIT (1959) 37 ITR 151 - THE AO IS ENTITLED TO BASE THE ASSESSMENT ON PURE GUESS WORK WITHOUT REFER TO ANY EVIDENCE OR MATERIAL AND THE ASSESSMENT CANNOT BE MADE BASED ON SUSPICION. 6. AFTER CAREFULLY GOING THROUGH THE SUBMISSIONS OF THE APPELLANT AND THE FACTS AS BR OUGHT OUT IN THE RECORDS, IT IS OBSERVED THAT THE AO HAS REJECTED THE BOOKS OF ACCOUNT OF THE APPELLANT CONCERN FOR NOT MAINTAINING PIECE WISE STOCK REGISTER AND QUALITATIVE DETAILS THEREOF. THE AO, THEREFORE, REACHED THE CONCLUSION THAT THE BOOKS OF ACCO UNTS OF THE APPELLANT DID NOT DISCLOSE THE TRUE AND CORRECT VALUATION OF CLOSING STOCK. HOWEVER, IT IS PERTINENT TO MENTION THAT THE APPELLANT HAS MAINTAINED ITS STOCK REGISTER ON THE BASIS OF CARATS EVEN IN EARLIER YEARS AND HAS GIVEN COGENT REASONS FOR N OT MAINTAINING PIECE WISE STOCK DETAILS AND FOLLOWING CARAT WISE STOCK REGISTER. IT IS ALSO PERTINENT TO NOTE THAT VALUATION OF CLOSING STOCK HAS NOT BEEN ESTIMATED BY THE AO AT ANY POINT OF TIME BASED ON THE CRITERIA OF PIECE WISE STOCK STATEMENT WHICH RE SULTED IN A DIFFERENT FIGURE THAN THAT ADOPTED BY THE APPELLANT. IT IS ALSO TO BE NOTED THAT FOLLOWING THE FIFO METHOD OR LIFO METHOD OF STOCK STATEMENT COULD ALSO ENABLE DETERMINATION OF THE CORRECT VALUATION OF CLOSING STOCK WHICH THE AO DID NOT RESORT T O. THUS, IN THE ABSENCE OF ANY DIFFERENCE IN VALUATION OF THE CLOSING STOCK, SIMPLY REJECTING THE BOOKS ON FLIMSY GROUNDS OF MAINTAINING PIECE WISE DETAILS IS NOT TENABLE IN LAW. ONCE THE APPELLANT STARTS MAINTAINING PIECE WISE DETAILS, THE SAME LOGIC CAN BE ATTRIBUTED FOR REJECTION OF THE BOOKS ON OTHER PARAMETERS ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 7 LIKE CARATAGE, CUT, COLOUR AND CLARITY OF EACH SUCH PIECE. THE FACT THAT THE ASSESSEE HAS MAINTAINED A DETAILED STOCK REGISTER ON CARAT B AND THAT VALUATION OF STOCK IS DONE ON THE BASIS OF COST OR MARKET PRICE WHICH EVER IS LOWER, MAKES THE BOOKS OF ACCOUNTS OF SELF SUFFICIENT TO DETERMINE THE CORRECT VALUATION OF STOCK. THE VARIOUS CASE LAWS LEND CREDENCE TO THIS VIEW AS WELL. THE FACT THAT THE AO DID NOT PROVIDE ANY OPPORTUNITY TO THE APPELLA NT BEFORE SUCH REJECTION OF BOOKS OF ACCOUNTS ALSO GOES AGAINST THE ESTABLISHED VIEWS ON THE SUBJECT BY VARIOUS FORA OF JUSTICE WHICH ARE ENUMERATED BELOW. 'ASSESSEE MUST BE GIVEN OPPORTUNITY TO REBUT ESTIMATE - WHERE THE ITO DID NOT STATE THE BASIS OF HI S ESTIMATE AND NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO REBUT THAT BASIS, HIS ORDER WAS LIABLE TO BE SET ASIDE - S. SARABHAIAH SETTY & SONS V. CIT [1967] 64 ITR 175 (AP) WHERE, AFTER REJECTING THE ACCOUNTS OF THE ASSESSEE, AN ESTIMATE OF THE TURNOVER A ND GROSS PROFITS IS FIXED TO THE DETERMENT OF THE ASSESSEE, THE ASSESSEE IS ENTITLED TO KNOW THE BASIS AND ALSO TO AN OPPORTUNITY TO REBUT THE SAME - YAGGINA VEERARAGHAVULU & MAVULETI SOMARAJU & CO. V. CIT [1966] 62 ITR 528 (AP). ASSESSEE MUST BE FURNISHE D WITH DETAILS OF COMPARABLE CASES RELIED UPON - AN ASSESSMENT MADE BY ESTIMATING THE PROFITS OF THE ASSESSEE ON FLAT RATE BASIS ON THE BASIS OF COMPARABLE CASES, WITHOUT FURNISHING DETAILS OF SUCH CASES TO THE ASSESSEE, :IS ILLEGAL - JOSEPH THOMAS & BROS. V. CIT [1968] 68 ITR 796 (KER.). ASSESSEE MUST BE PROVIDED OPPORTUNITY TO CROSS - EXAMINE WITNESSES - WHILE ESTIMATING PROFITS WHERE ORAL EVIDENCE OF WITNESS WAS RELIED ON BY THE INCOME - TAX AUTHORITIES, THE ASSESSEE MUST BE GIVEN OPPORTUNITY TO CROSS - EXAMIN E THE WITNESS AND WHERE COMPARATIVE INSTANCES OF OTHER BUSINESS WERE SUPPLIED BY ASSESSEE IT WAS ALSO NECESSARY FOR THE DEPARTMENT TO COME TO A FINDING AS TO THE NORM OF THE GROSS PROFIT ON THE BASIS OF COMPARATIVE CASES - CIT V. EASTERN COMMERCIAL ENTERPR ISES [1994] 210 ITR 103 (CAL.). ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 8 BASIS FOR ESTIMATION AND COMPUTATION MUST BE DISCLOSED BY ITO IN A SPEAKING ORDER - IF THE ASSESSEE FAILS TO SATISFY THE ITO AS TO THE CORRECTNESS OF THE PROFITS RETURNED BY H|M, IT IS OPEN TO THE ITO TO TAKE A HIGHER PERCE NTAGE CONSISTENT WITH THE STATE OF TRADE IN THE LOCALITY OR WITH ANY SPECIAL CIRCUMSTANCES OF THERASSESSEE WHICH WARRANT HIGHER RATE OF PROFITS. HOWEVER THE ITO MUST DISCLOSE THE. BASIS AND MANNER OF COMPUTATION AND MAKE HIS ORDER A SPEAKING ORDER - SETH N ATHURAM MUNALAL V. C/R[1954] 25 ITR 216 (NAG.). ESTIMATION MUST NOT BE ARBITRARY, VAGUE AND FANCIFUL BUT MUST BE LEGAL AND REGULAR - THE LAW SAYS THAT THE ITO SHALL MAKE THE ASSESSMENT TO THE BEST OF HIS JUDGMENT; IT MEANS THAT HE MUST MAKE IT ACCORDING TO THE RULES OF REASON AND JUSTICE, NOT ACCORDING TO PRIVATE OPINION, BUT ACCORDING TO LAW AND NOT HUMOUR, AND THAT THE ASSESSMENT IS TO BE NOT ARBITRARY, VAGUE AND FANCIFUL, BUT LEGAL AND REGULAR - MYSORE FERTILISER CO. V. CIT [1966] 59 ITR 268 (MAD.). E STIMATE BASED ON BOTH RELEVANT AND IRRELEVANT MATERIAL CANNOT BE SUSTAINED EVEN PARTLY - IF AN ESTIMATE IS BASED PARTLY ON IRRELEVANT MATERIAL AND PARTLY ON RELEVANT MATERIAL, IT IS DIFFICULT TO SUSTAIN THE ESTIMATE BECAUSE IT CANNOT BE SAID AS TO WHAT EXT ENT AND WHICH PART OF THE FIGURE OF ESTIMATE DEPENDS UPON THE IRRELEVANT PORTION OF THE MATTER - SURAJMAL CHAMPALAL V. CIT [1967] 66 ITR 396 (PAT.). BOOK ENTRIES ARE NOT RELEVANT TO ALLOW DEDUCTIONS - WHETHER THE ASSESSEE IS ENTITLED TO A PARTICULAR DEDUC TION OR NOT WILL DEPEND ON THE PROVISION OF LAW RELATING THERETO AND NOT ON THE VIEW WHICH THE ASSESSEE MIGHT TAKE OF HIS RIGHT NOR CAN THE EXISTENCE OR ABSENCE OF ENTRIES IN THE BOOKS OF ACCOUNT BE DECISIVE OR CONCLUSIVE IN THE MATTER KEDARNATH JUTE MFG. CO. LTD. V. CIT [1971] 82 ITR 363 (SC). WHERE ESTIMATION HAS NEXUS TO MATERIAL ON RECORD AND EXERCISE OF DISCRETION IS NOT ARBITRARY OR CAPRICIOUS, TRIBUNAL'S FINDINGS ARE ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 9 UNQUESTIONABLE - SO LONG AS THE BEST JUDGMENT HAS NEXUS TO MATERIAL ON RECORD AND THE DISCRETION IN THAT BEHALF HAS NOT BEEN EXERCISED ARBITRARILY OR CAPRICIOUSLY, IT IS NOT OPEN TO SCRUTINY IN REFERENCE PROCEEDINGS TO GIVE RISE TO A QUESTION OF LAW OR TO A MIXED QUESTION OF LAW AND FACT - CITV. SURJIT SINGH MAHESH KUMAR [1994] 210 ITR 83 (ALL.). ASSESSING OFFICER MUST FIRST COUNTER THE ASSESSEE'S EVIDENCE ABOUT GROT PROFIT RATE - WHERE THE ASSESSEE HAS GIVEN A COMPARATIVE INSTANCE OF GROSS PROFIT RATE, IT IS NECESSARY FOR THE DEPARTMENT TO COME TO A FINDING AS TO THE NORM OF THE GROSS PROFIT ON THE BASIS OF COMPARATIVE CASES. THEREFORE, IT IS THE DUTY OF THE ASSESSING OFFICER TO COUNTER THE COMPARATIVE STATEMENT CITED BY THE ASSESSEE BEFORE HE CAN HAVE THE OPTION TO ESTIMATE THE GROSS PROFIT - CIT V. EASTERN COMMERCIAL ENTERPRISES [19 94] 210 ITR 103 (CAL.).' 6.1 EVEN THOUGHT THE AO MIGHT HAVE STRONG REASONS TO RAISE HIS SUSPICION ABOUT THE CORRECTNESS OF THE BOOK RESULTS, HOWEVER STRONG THE BASIS COULD BE, IT CANNOT FORM THE SOLE BASIS OF ASSESSMENT IN WITHOUT BRINGING ON RECORD MATERIAL EVIDENCES AND WITHOUT COGENT REASONING THEREFORE. 6.2 IN VIEW OF THE ABOVE, I INCLINE TO AGREE WITH THE CONTENTIONS OF THE APPELLANT THAT REJECTION OF BOOKS IS NOT TENABLE IN LAW AND ON FACTS OF THE CASE. 6.3 IN RESULT, THE APPELLANT SU CCEEDS ON THIS GROUND. THIS LEAVES THE REVENUE AGGRIEVED. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT CASE RECORD. THE REVENUE STRONGLY ARGUED IN FAVOUR OF THE ASSESSING OFFICERS ACTION REJECTING BOOKS OF ACCOUNT. THE ASSESSEE SUPPORT S THE CIT(A)S ORDER. THERE IS NO DISPUTE THAT ASSESSEES BOOKS OF ACCOUNT PERTAINING TO ITS DIAMOND STOCK ARE BEING MAINTAINED ON CARAT BASIS. THIS METHOD IS CONSISTENTLY FOLLOWED IN PRECEDING AND ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 10 SUCCEEDING ASSESSMENT YEARS. THE CASE FILE CONTAINS D ETAILS OF QUALITY - WISE CLOSING STOCK AS ON 31 ST MARCH, 2007, AUDIT REPORT AS WELL AS SAMPLE COPY OF STOCK REGISTER FOR MARCH 2007 RELATING TO THE RELEVANT PREVIOUS YEAR. THE REVENUE FAILS TO CONTROVERT CORRECTNESS THEREOF EXCEPT MAKING ORAL SUBMISSIONS. THE ABOVE STATED CONSISTENCY OF PAST PRACTICE IN MAINTAINING BOOKS AND STOCK CARAT - WISE IS NOT REBUTTED. THERE IS NO OTHER MATERIAL QUOTED SO AS TO REJECT ASSESSEES BOOKS OF ACCOUNT. WE UPHOLD THE CIT(A)S ORDER IN THESE FACTS AND HOLD THAT THE SAME DOE S NOT CALL FOR ANY INTERFERENCE. THE REVENUES FIRST SUBSTANTIVE GROUND ACCORDINGLY FAILS. 4. THE REVENUES SECOND SUBSTANTIVE GROUND RELATES TO ADDITION OF RS.90,12,001/ - MADE AFTER ESTIMATION OF GROSS PROFIT. THE CIT(A)S FINDING HOLD THAT HIS DECIS ION ON THE FIRST ISSUE RENDERS THIS GROUND INFRUCTUOUS. HE ALSO ACCEPTS THE ASSESSEES CONTENTION ON MERITS AS UNDER: 7. AFTER REJECTING THE BOOKS OF ACCOUNTS, THE AO FURTHER PROCEEDED TO EXAMINE THE FALL IN GP RATE IN THE CURRENT YEAR AS AGAINST THAT OF THE EARLIER YEARS IN THE APPELLANT'S OWN CASE. WITH RESPECT TO THE FALL IN GP RATE TO 3.99% FROM 6.00% IN THE IMMEDIATE PRECEDING YEAR, THE AO DID NOT ACCEPT THE ASSESSEE'S CONTENTION THAT IT IS SUPPORTED BY ALL DOCUMENTARY EVIDENCES OF THE TRANSACTIONS RECORDED IN THE BOOKS OF ACCOUNTS AS WELL AS INCREASE IN NP RATIO AND ALSO THE VOLUME OF TURNOVER. THE AO FURTHER REJECTED THE EXPLANATION OF THE ASSESSEE THAT THE FALL IN GP WAS MAINLY DUE TO FALL IN SALE PRICE BOTH IN THE DOMESTIC AND EXPORT MARKETS BY HOLDING THAT THERE WAS A CORRESPONDING FALL IN THE PURCHASE PRICE TOO. THUS, THE AO REACHED THE CONCLUSION THAT INACCURATE PARTICULARS WERE FURNISHED BY THE ASSESSEE AND IT RESORTED TO UNDER REPORTING OF GP RATIO OF THE BUSINESS. THE AO THEREAFTER, PROCEED ED TO ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 11 ESTIMATE THE GP AT THE RATE OF 6%, AS WAS THE CASE IN THE IMMEDIATE PRECEDING YEAR IN ASSSESSEE'S OWN CASE AND MADE AN ESTIMATED ADDITION AMOUNT OF RS.90,12,001/ - TO THE INCOME RETURNED. 8. THE APPELLANT SUBMITTED THAT THE APPELLANT FIRM WAS M AINTAINING REGULAR BOOKS OF ACCOUNTS AND FOLLOWED A CONSISTENT METHOD OF ACCOUNTING YEAR AFTER YEAR. IT WAS FURTHER SUBMITTED THAT THE METHOD OF VALUATION OF CLOSING STOCK FOLLOWED BY THE FIRM WAS ALSO THE ACCEPTED METHOD, IE., VALUATION OF CLOSING STOCK AT COST OR MARKET PRICE WHICHEVER IS LOWER. IT IS ALSO SUBMITTED THAT THE APPELLANT'S BOOKS OF ACCOUNTS WERE DULY AUDITED AND IT HAS FOLLOWED ALL THE PRESCRIBED ACCOUNTING STANDARDS. SALES AND PURCHASES HAVE ALSO BEEN DULY REFLECTED AND ACCOUNTED FOR IN TH E BOOKS OF ACCOUNTS WITH SUPPORTING EVIDENCES OF BILLS AND INVOICES. IT IS THEREFORE SUBMITTED THAT EACH TRANSACTION AS RECORDED IN THE BOOKS OF ACCOUNT IS GENUINELY SUPPORTED BY VERIFIABLE EVIDENCES AND THAT THERE IS NO NEED TO ESTIMATE THE GP AT A DIFFE RENT RATE THAN THAT ARRIVED AT ON THE BASIS OF SUCH REGULAR BOOK RESULTS. IT IS FURTHER SUBMITTED THAT AS THE VOLUME OF PROFIT WAS THE PRIME MOTIVE OF BUSINESS AND NOT THE RATE OF PROFIT, MAINTENANCE OF SAME GP AS OF THE PREVIOUS YEAR AT THE SAME LEVEL COU LD NOT BE PRUDENTLY EXPECTED FROM THE BUSINESS MAN'S POINT OF VIEW. IT IS FURTHER POINTED OUT THAT THE REASONS FOR SUCH FALL IN GP AS ADDUCED B APPELLANT WERE NOT PROVED AS WRONG BY THE AO WITH ANY COGENT EVIDENCE OR MATERIAL ON RECORD. SINCE EACH YEAR IS DISTINCT AND DIFFERENT FROM THE EARLIER YEARS, THE ATTEMPT OF THE AO TO ESTIMATE THE GP ON THE BASIS OF THE PRECEDING YEAR WITHOUT ESTABLISHING AS TO HOW BOTH WERE COMPARABLE WAS ALSO UNTENABLE, PARTICULARLY VIEW OF THE FACT THAT THE VOLUME OF TURNOVER HA S INCREASED 250% OVER THE PRECEDING YEAR. IT IS ALSO SUBMITTED THAT THE AO IGNORED THE DECREASE IN SALE PRICE OF EXPORTED POLISHED DIAMONDS BY RS.1,251/ - AT 15.8P/0 AND THAT OF LOCAL SALE OF POLISHED DIAMONDS BY RS.3,406/ - AT 45.5% WHILE ESTIMATING THE GP OF THE CURRENT YEAR AS AGAINST THAT OF THE PRECEDING YEAR. IT WAS FURTHER CONTENDED THAT THERE WERE SUCH VARIANCAES IN GP IN THE APPELLANT'S OWN CASE IN THE EARLIER YEARS AS WELL, AS POINTED OUT BY THE AO IN THE ASSESSMENT ORDER ITSELF, WHICH WERE ACCEPTED BY THE DEPARTMENT IS THOSE ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 12 YEARS AS SUCH. THE APPELLANT FURTHER CONTENDS THAT THE FIRM WAS NOT PROVIDED AN OPPORTUNITY OF BEING HEARD PRIOR TO SUCH ESTIMATION OF GP AT A HIGHER RATE ON THE BASIS OF THE PRECEDING YEAR WHICH IS AGAINST THE JUDICIAL DICTUM. IT IS THE R E FO RE, PLEADED THAT WITHOUT POINTING ANY SPECIFIC DEFECTS IN THE ABSE NCE OF ANY VERIFIABLE EVIDENCE, THE AO'S ESTIMATION OF GP BASED ON PREVIOUS YEARS FIGURES IS UNCALLED FOR AND HENCE BE REVERSED. 9. AFTER REJECTING THE BOOKS OF ACCOUNT S, THE AO PROCEEDED TO ESTIMATE GP BASED ON THE RATIO OF GP OF THE IMMEDIATE PRECEDING YEAR. IN THE FIRST GROUND, DISCUSSED SUPRA, AS THE REJECTION OF BOOKS ITSELF HAS BEEN HELD AS UNTENABLE IN LAW AND ON FACTS, IT NATURALLY FOLLOWS THAT WITHOUT ANY BASIS FOR SUCH REJECTION, ESTIMATION OF GP AT A FIGURE DIFFERENT FROM THE BOOK RESULTS OF THE CURRENT YEAR DOES NOT STAND ON FOURS AND IS NOT BASED ON LAW AND FACTS OF THE CASE. WITHOUT PREJUDICE TO THIS, IT IS ALSO NOTEWORTHY TO MENTION THAT EVEN ON MERITS, THE ESTIMATION OF GP BASED ON PREVIOUS YEAR'S FIGURE ITSELF IS NOT CORRECT ACCOUNTING AS EVERY YEAR IS DISTINCT AND DIFFERENT AND RES JUDICATA DOES NOT APPLY IN INCOME TAX PROCEEDINGS AND GP RATES ARE LIABLE TO VARY. DURING THE ASSESSMENT PROCEEDINGS, ESTIMAT ION OF GP HAS ALSO NOT BEEN BASED ON COMPARABLE CASES OR INSTANCES, OR AVERAGE OF GP RATES OVER THE YEARS. WITHOUT ANY SINGLE EVIDENCE - TO JUSTIFY THE INCREASE IN THE GP RATIO, THE AO ADOPTED THE RATE OF 6% ON THE BASIS OF THE PRECEDING YEAR, IGNORING THE FACT THAT THE VOLUME OF TRADE HAS SIGNIFICANTLY INCREASED ALMOST BY 250% IN THE CURRENT YEAR. THE SAME LOGIC, IF APPLIED, THEN THERE WILL BE NO VARIATION IN THE GP RATES OF ANY ASSESSEE OVER THE YEARS. EVEN IF THE BOOKS ARE RIGHTFULLY REJECTED, IT IS ESSEN TIAL FOR THE REVENUE TO POINT OUT THE DEFECTS THAT JUSTIFY THE INCREASED ESTIMATION OF GP WHICH HAS NOT BEEN DONE IN THE INSTANT CASE. IT IS ALSO NOTEWORTHY THAT THE APPELLANT WAS NOT GIVEN ANY OPPORTUNITY TO REBUT SUCH ESTIMATION OF THE GP AT A HIGHER RAT E, WHICH IS AGAINST THE JUDICIAL VIEW IN THIS ARENA AS ELUCIDATED IN THE PRECEDING GROUND DISCUSSED SUPRA. 9.1 IN VIEW OF THE ABOVE, I AM INCLINED TO AGREE WITH THE CONTENTIONS OF THE APPELLANT THAT THE ESTIMATION OF GP AT A ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 13 HIGHER RATE ON THE BASIS O F THE PRECEDING YEAR IN APPELLANTS CASE IS UNTENABLE AND THEREFORE, THE AO IS DIRECTED TO DELETE THE ADDITION MADE IN THIS REGARD. 9.2 IN RESULT, THE APPELLANTS GROUND SUCCEEDS ON THIS COUNT. 5. WE HAVE HEARD RIVAL CONTENTIONS. IT IS ADMITTED THAT A SSESSEES GROSS PROFIT FROM ASSESSMENT YEAR 2004 - 05 TO THE IMPUGNED ASSESSMENT YEAR 2007 - 08 READS 9.67%, 5.04%, 6% AND 3.96%; RESPECTIVELY. THE ASSESSEE ATTRIBUTED THIS FALL TO INCREASE IN TURN OVER ALONG WITH DECLINE IN EXPORT AND LOCAL RATES @ RS.1,251/ - AND RS.3,406/ - RESPECTIVELY. THE ASSESSING OFFICER NEITHER DISPUTES THIS RATE FLUCTUATION SPECIFICALLY NOR DOES HE DRAW ANY COMPARABLE INSTANCE TO RE - ESTIMATE THE IMPUGNED GROSS PROFIT. BE THAT AS IT MAY, THE FACT ALSO REMAINS THAT THE VERY BASIS OF TH IS ESTIMATION IS REJECTION OF ASSESSEES BOOKS OF ACCOUNT WHICH ALREADY STANDS DECIDED AGAINST THE REVENUE. IT ALSO FAILS TO QUOTE ANY EVIDENCE MUCH LESS IS SPECIFIC ONE CITING APPROPRIATE COMPARABLE INSTANCES IN THE COURSE OF HEARING. WE UPHOLD THE LOWE R APPELLATE FINDINGS ACCORDINGLY. THE REVENUES SECOND SUBSTANTIVE GROUND STANDS REJECTED. 6. THE REVENUES THIRD SUBSTANTIVE GROUND RAISES THE ISSUE OF FALL IN DIAMOND YIELD BY 1.28% RESULTING IN ADDITION OF RS.1,97,13,893/ - BEING MADE IN ASSESSMENT ORD ER AND DELETED IN LOWER APPELLATE PROCEEDINGS. THE CIT(A)S OBSERVATION ON THIS ISSUE ARE REPRODUCED AS UNDER: 10. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE YIELD RATIO OF THE ASSESSEE FIRM HAS DECREASE D IN THE RELEVAN T YEAR TO 27.63% FROM 28.91% ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 14 IN THE IMMEDIATELY PRECEDING PREVIOUS YEAR. THE A O DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE REASONS FOR SUCH FALL. TH E AO INFERRED THAT AS THE ASSESSEE WAS USING MODERN AND ADVANCED SOPHIST ICATED E QUIPMENTS INSTEAD OF CONVENTIONAL CUTTING TOOLS, THE YIELD SHOULD HAVE BEEN BETTER RATHER THAN SHOWING A DECLINE. THE AO, ALSO CITED THE YIELD RATIO OF A COMP ARABLE INSTANCE IN THE CASE OF A THIRD PARTY, M/S.PALADIA BROTHERS, IN SUPPORT OF HIS ASSUMPTIONS AND THEREFORE PROCEEDED TO ESTIMATE THE YIELD RATIO ON THE BASIS OF FIGURES OF IMMEDIATELY PRECEDING YEAR OF THE ASSESSEE FIRM AT THE RATE OF 28 .91% AND MADE AN ADDITION OF RS. 1,97,13,893 / - O N THIS COUNT. 11. THE APPELLANT CONTENDED THAT THE YIEL D RATIO IS LIABLE TO VARY IN DIFFERENT YEARS AND DEPENDS UPON THE REJECTION RATIO IN THE MANUFACTURING PROCESS. THE NUMEROUS FACTORS AFFECTING THE YIELD BEING QUALITY OF ROUGH PURCHASED, THE SKILL LEVEL AND EXPERIENCE OF THE WORKERS, EFFICIENCY OF MANAGEM ENT, TURNOVER O F THE UNIT, BUSINESS SET UP, ETC., THE STRAIGHT JACKET COMPARISON OF SUCH RATIO FOR DIFFERENT YEARS MAY LEAD TO BIASED DECISION IN THE ABSENCE OF THE FULL PARTICULARS OF DA TA OF THE WHOLE BUSINESS OF THE RELEVANT POINT OF TIME. IT IS FURTHER CONTENDED THA T THE BUSINESSMAN ALSO CANNOT PREDICT THE YIELD RATIO TILL THE TIME THE ULTIMATE PRO DUCT COMES OUT OF THE MANUFACTURING PROCESS SINCE YIELD FROM EACH SUCH ROUGH C OULD ALSO VARY. IT IS FURTHER SUBMITTED THAT AS THE GENUINENESS OF THE YIELD IS PROVED BEYOND DOUBT THROUGH DOCUMENTARY EVIDENCES AS DISCLOSED IN THE B OOKS OF ACCOUNTS, AND AS THE AO HAS NOT POINTED OUT ANY SPECIFIC DEFICIENCY IN THI S REGARD WHICH RAISES ANY DOUBT AS TO THE SUPPRESSION OF THE SAME, THE ESTIMATION OF A HIGHER YIELD R ATIO BY THE AO IS UNCALLED FOR. IT IS FURTHER POINTED OUT THAT THE A O, WHILE HOLDING A VARIANCE OL.28% IN THE YIELD AS A SHARP DECLINE, HAS CON VENIENTLY BRUSHED ASIDE THE STEEP DECREASE OF 17.82% IN THE COST PER CARAT, AS EVIDE NCED BY THE TABULATED DATA I N THE ASSESSMENT ORDER ITSELF, AND CHOSE TO CALL IT AS A MARGINAL DECLINE, SHOWS THE SELF CONTRADICTORY VIEWS, QUITE INDICATIVE ENOUGH OF THE PREJUDICED MIND SET AND THE BIASED APPROACH OF THE AO TO THE WHOLE GA MUT OF THE ISSUE. IT IS FURTHER CONTENTED THAT THE AO'S PRESUMPTIONS ARE NOT BASED O N COGENT EVIDENCES BUT IS AT BEST A SUBJECTIVE OPINION ON THE BASIS OF ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 15 CERTAIN PRESU MPTIONS AND GENERALIZATIONS ABOUT THE VARIOUS ASPECTS OF THE WHOLE ISSUE. IT IS TH EREFORE, SUBMITTED THAT THE AO'S ARGUMENTS FOR ESTIMATING THE YIELD RATIO AT A H IGHER RATE WERE QUITE FLAWED. IT IS ALSO CONTENDED THAT THE AO DID NOT PROVIDE ANY OPP ORTUNITY BEFORE SUCH ESTIMATION TO REBUT HIS PRESUMPTIONS EVEN THOUGH HE FORMED HI S BELIEF ON THE BASIS OF A THIRD PARTY, CONSIDERED AS CO MPARABLE BY HIM. IT IS FURTHER POINTED OUT THAT THE AO HAS ALSO FAILED TO ELUCIDATE AS TO HOW THE THIRD PARTY CASE IS CONSIDERED AS A COMPARABLE INSTANCE BY VIRTUE OF SIMILAR QUALITY OF ROUGH DI AMONDS USED IF ANY AND OR THE REJECTION RATE OF THAT PARTY, NOR WAS THE APPELLANT CALL ED UPON TO OFFER ANY REBUTTAL ON SUCH ASSUMPTIONS BY THE AO. THUS, RELYING ON THE VARIOUS CASE LAWS, THE APPELLANT PLEADS THAT THE ADDITION MADE ON THIS COUNT BE DELETE D. 12. BASED UPON THE DECISION IN GROUND NO.1 , IT IS NATU RAL COROLLARY THAT AS REJECTION OF BOOKS IS NOT UPHELD, THE ESTIMATE OF YIELD RATIO BY THE AO BEYO ND BOOK RESULT IS UNTENABLE IN LAW. HOWEVER, WITHOUT PREJUDICE TO THE SAME, EVEN O N FACTS, THE FOLLOWING MERITS ATTENTION. 7. WE HAVE HEARD BOTH THE PARTIE S. THE REVENUE HAS FILED A CHART DEMONSTRATING THE IMPUGNED YIELD RATIO OF DIAMONDS FROM ASSESSMENT YEAR 2004 - 05 ONWARDS TO BE 30.35%, 26.93%, 28.91% AND 27.63% RESPECTIVELY. A COMPARABLE CHART OF ANOTHER ENTITY M/S. PALADIA BROTHERS IS ALSO QUOTED TO HI GHLIGHT THE IMPUGNED LOW YIELD. THE REVENUE ACCORDINGLY PRAYS FOR RESTORATION OF THE IMPUGNED SUPPRESSED LOW YIELD ADDITION. WE ARE OF THE OPINION THAT ONCE THE ASSESSEES BOOK RESULT ALREADY STANDS ACCEPTED IN PRECEDING PARAGRAPH, THIS ISSUE IS RENDERED ACADEMIC. WE FURTHER NOTICE THAT THE VERY YIELD IN ASSESSMENT YEAR 2005 - 06 WAS 26.93% MUCH LESS THAN 30.35% IN ASSESSMENT YEAR 2004 - 05. THIS YEAR COMPRISES OF YIELD RATE @ 27.63% IE. MUCH MORE THAN THAT IN ASSESSMENT YEAR 2005 - 06. THE ASSESSING OFFICE R DOES NOT SEEM TO HAVE MADE ITA NO. 2454 /AHD/201 0 (DCIT VS. M/S . BHADIYADRA GEMS) ASST. YEAR - 200 7 - 0 8 16 ADDITION ON ACCOUNT OF YIELD FLUCTUATION ATTRIBUTABLE TO PECULIARITIES OF THE ASSESSEES BUSINESS. NOR IS ANY SPECIFIC MATERIAL PIN POINTING DEFECTING THE YIELD RATE IN QUESTION IS BEING CITED. WE ACCORDINGLY HOLD THAT THE CI T(A) HAS RIGHTLY REVERSED THE ASSESSING OFFICERS FINDINGS UNDER CHALLENGED. THIS LAST SUBSTANTIVE GROUND RAISED IN THIS APPEAL ALSO FAILS. 8 . THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 /8/15 SD/ - SD/ - ( PRAM OD KUMAR ) ACCOUNTANT MEMBER ( S. S. GODARA ) JUDICIAL M EMBER TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD