D.C.I.T.-CC-XXX,Kol, Kolkata V. M/s BESCO Ltd., Kolkata

ITA 2717/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1880 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 13-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2013
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: MANJU L SHUKLA
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI J.SUDHAKAR REDDY, AM & S.S.VISWANETHRA RAVI, JM ./ ITA NO.2716 TO 2720/KOL/2013 ( / ASSESSMENT YEAR:2006-2007 TO 2010-2011) DCIT, CC-XXX, KOLKATA VS. M/S BESCO LTD, 8, ANIL MAITRA ROAD, KOLKATA-700019 ./ ./PAN/GIR NO. : AABCB 2723 R ( /APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI NIRAJ KUMAR, CIT DR /ASSESSEE BY: MS. MANJU L. SHUKLA, FCA / DATE OF HEARING : 26/04/2017 /DATE OF PRONOUNCEMENT 26/04/2017 / O R D E R PER J.SUDHAKAR REDDY, AM: ALL THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS)-III KOLKATA, DATED 30.09.2013 FOR THE ASSESSMENT YEARS 2006-07 T O 2010-11. 2. SINCE COMMON ISSUES ARE INVOLVED IN ALL THE APPE ALS OF THE REVENUE, THEREFORE, ALL THE APPEALS ARE HEARD ALTOG ETHER AND DISPOSED OFF BY THIS COMMON ORDER. THE FACTS MENTIONED IN ITA NO .2716/KOL/2013 ARE TAKEN INTO CONSIDERATION FOR DECIDING ALL THE APPEA LS. 3. FACTS OF THE CASE BROUGHT OUT BY THE LD. CIT(A) FROM PARA 5 TO PARA 9 OF HIS ORDER ARE EXTRACTED BELOW FOR READY REFERE NCE :- 1. INTRODUCTORY FACTS AND CIRCUMSTANCES OF THE CASE , THE GROUPS, THE ISSUES, AND THE SEQUENCE OF THE ASSESSMENT ORDERS. THE CASE IS PECULIAR, AND THEREFORE A PRIOR BRIEF O F THE FACTS AND ISSUES WILL HELP TO BETTER UNDERSTAND THE CASE AND ITS CIRCUMSTANCES. FURTHER DETAILS WILL BE LATER AT THE RELEVANT PART IN THIS ORDER. ITA NO.2716/2013 M/S BESCO LTD. 2 THE PROMOTER OF THE APPELLANT COMPANY - BESCO LIMIT ED [HEREINAFTER REFERRED TO AS 'BESCO'] - IS THE TANTI A FAMILY. BESCO HAS BEEN IN EXISTENCE FOR PAST 75 YEARS. IT IS A PU BLIC LISTED COMPANY. I3ESCO IS INTO THE BUSINESS OF MANUFACTURI NG OF RAIL WAGONS/CARS/BOGEYS/COUPLERS ETC FOR THE RAILWAYS. B ESCO HAS 2 MAJOR DIVISIONS - THE FOUNDRY DIVISION AND THE WAGO N DIVISION. IN THE YEAR 2004 THE TANTIA FAMILY WERE THE 2 BROTH ERS - SHRI O. P. TANTIA AND SHRI. A.K. TANTIA ALONG WITH THEIR RESPE CTIVE FAMILY MEMBERS. THE SHAREHOLDING IN BESCO WAS O.P TANTIA [ HEREINAFTER REFERRED TO AS OPT GROUP AND A.K. TANTIA [HEREINAFT ER REFERRED TO AS OPT GROUP'] EACH HOLDING 17.86% SHARES. OTHER GROUP COMPANIES/INVESTMENT COMPANIES HELD 46.77% SHARES I N THE COMPANY. THERE ARE 12 SUCH INVESTMENT COMPANIES. IN THESE INVESTMENT COMPANIES, BOTH OPT GROUP AND AKT GROUP HAD SHAREHOLDING. DISPUTES AND DIFFERENCES HAVING ARISEN BETWEEN THE TWO BROTHERS/GROUPS, THEY ENTERED INTO A FAMILY SETTLEM ENT IN DECEMBER, 2004. THE FAMILY SETTLEMENT PROVIDED FOR DIVISION OF THE ASSETS OF BESCO [I.E., FOR DEMERGER OF THE COMPANY] BETWEEN THE TWO GROUPS, AS ALSO EQUAL DIVISION OF THE INVESTMEN T COMPANIES. FURTHER DISPUTES AROSE IN THE IMPLEMENTATION OF THE FAMILY AGREEMENT. BY A SEPARATE AGREEMENT DATED 27.12.2004 BOTH THE GROUPS REFERRED THE DISPUTES TO AN ARBITRATION PANE L. EVEN SO, THE FAMILY SETTLEMENT COULD NOT HE AMICABLY SETTLED. OP T GROUP IN THE YEAR 2005 RILED PETITIONS/APPLICATIONS UNDER THE CO MPANIES ACT, 1956 BEFORE THE COMPANY LAW BOARD [HEREINAFTER REFE RRED TO AS 'CLB], PRINCIPAL BENCH, AT NEW DELHI. THE PETITIONS WERE FILED U/S 397 [APPLICATION FOR RELIEF IN CASES OF OPPRESSION] , AND U/S 398 [APPLICATION FOR RELIEF IN CASES OF MISMANAGEMENT. THOUGH THE PETITIONS WERE IN THE NAME OF THE INVESTMENT COMPAN IES, BOTH THE GROUPS SUBMITTED BEFORE THE HONBLE CLB THAT AS THE INVESTMENT COMPANIES WERE HOLDING COMPANIES IN BESCO, THE PETITION/DISPUTES WILL COVER THE MAIN COMPANY - BES CO. THUS BESCO DEMERGER ISSUE AND DISPUTES SINCE THEN ARE BE FORE THE HONBLE CLB. BEFORE THE CLB, EVER SINCE THEN THERE HAVE BEEN SPATES OF APPLICATIONS/ALLEGATIONS AND COUNTER APPLICATIONS/ALLEGATIONS BY BOTH THE GROUPS, WHICH IS STILL GOING ON TILL DATE. THE HON'BLE CLB HAD SINCE THEN PASSED SOME INTERIM ORDERS, SIGNIFICANT OF WHICH ARE: A. CLB ORDER DATED 03/10/2005 RESTRAINING THAT NO B OARD OR GENERAL MEETING OF BESCO OR ANY OF THE FINANCE COMP ANIES IN THE GROUPS WILL BE HELD WITHOUT LEAVE OF THE BENCH. B. AND VIDE OTHER ORDERS CULMINATING IN THE ORDER D ATED 28/04/2006 THE HON'BLE CLB INTER-ALIA HAD DIRECTED FOR THE EXC HANGE OF ITA NO.2716/2013 M/S BESCO LTD. 3 MANAGEMENT AND CONTROL OF WAGON DIVISION, ROLLING M ILL, INFOTECH DIVISION THEN WITH AKT GROUP TO THE OPT GROUP, AND, VICE VERSA EXCHANGE OF MANAGEMENT AND CONTROL OF FOUNDRY DIVIS ION, RUBBER DIVISION AND FOOD & FLAVOURS DIVISION THEN WITH OPT GROUP TO THE AKT GROUP. THE EXCHANGE WAS TO TAKE PLACE IN THE PR ESENCE OF THE SPECIAL OFFICER. FURTHER, THAT THE STATUTORY AUDIT WAS TO BE DONE BY TWO STATUTORY AUDITORS. I.E., JOINT AUDITORS - EACH GROUP TO NOMINATE ONE AUDITOR AND THAT THE AUDIT BE COMPLETED BY 30/0 6/2006; THAT STATUS QUO BE MAINTAINED IN RESPECT OF SHAREHOLDING OF BESCO AND ALL INVESTMENT COMPANIES TILL DE-MERGER; THAT NO BO ARD OR GENERAL MEETING OF BESCO OR INVESTMENT COMPANIES IS TO BE H ELD NOR ANY VOTING RIGHTS IN RESPECT OF THE SHARE OF BESCO OR I NVESTMENT COMPANIES SHALL BE EXERCISED; AND THAT THE ORDER RE GARDING DE- MERGER EXERCISED WOULD BE ISSUED SEPARATELY. THE EXCHANGE OF MANAGEMENT TOOK PLACE ON THE 10/06/ 2006. HOWEVER THENCE AND THEREFROM HAVE ARISEN THE FURTHE R DISPUTES. THESE FURTHER DISPUTES PERTAIN TO RECEIVABLES, BANK LIABILITIES BANK RECONCILIATIONS. INVENTORIES, ETC. THUS THE SETTLEM ENT OF THE ACCOUNTS FROM 01.10.2005 TO 31.03.2006, AND, FROM 01.04.2006 TO 10.06.2006 HAS EVER SINCE BEEN IN DISPUTE. THE HONBLE CLB VIDE ITS ORDER DATED 14-/09/2009 I NTER-ALIA DIRECTED THAT SINCE THE EXCHANGE OF MANAGEMENT TOOK PLACE ON THE 10/06/2006, THIS ELATE WILL BE CUT OF DATE FOR THE DE-MERGER. THE HON'BLE CLB ALSO DIRECTED FOR JOINT STATUTORY AUDIT FOR THE PERIOD FROM 01/10/2005 TO 31/03/2006 AND ALSO FROM 01/04/2 006 TO 10/06/2006. JOINT STATUTORY AUDITORS WERE APPOINTED HOWEVER, DISPUTES AGAIN AROSE ON THE SELECTION OF JOINT AUDI TORS - WHICH MATTER WAS FURTHER TAKEN IN APPEAL BEFORE THE HON'B LE HIGH COURT; AND FURTHER TO THE HONBLE SUPREME COURT. THE MATTE R IS BACK TO THE HON'BLE CLB. AS ON DATE, THE MATTER OF COMPLETION O F THE STATUTORY AUDIT FOR THE PERIOD FROM 01/10/2005 IS STILL GOING ON IN THE PROCEEDINGS BEFORE THE HON'BLE CLB. FROM THE INCOME TAX PERSPECTIVE THE IMPACT OF ALL T HE ABOVE EVENTS AND ORDERS WAS, AND IS STILL THAT: AS THE ORDER FOR DE-MERGER IS STILL YET TO BE, BE SCO STILL REMAINS A SINGLE ENTITY. THAT IS, BESCO STILL REMAINS IN THE SAME STATUS AS A SINGLE PERSON/ASSESSEE AS HAS BEEN ALL ALONG IN EAR LIER YEARS. AS THERE HAS NOT BEEN/NOT YET COMPLETED THE COMPANY STATUTORY AUDIT FROM 01/10/2005 ONWARDS, THERE COULD NOT BE T AX AUDIT REPORT OR RETURN OF INCOME FROM THE A.V. 2006-07 ON WARDS. AS THE HON'BLE CLB HAD PASSED RESTRAINT ORDERS SINC E 03.10.2005 THAT NO BOARD OR GENERAL MEETING OF BESCO OR ANY OF THE FINANCE COMPANIES IN THE GROUPS WILL BE HELD WITHOUT LEAVE OF THE BENCH, BESCO COULD NOT FURNISH ITS CONSOLIDATED ACCOUNTS I N THE ASSESSMENT PROCEEDINGS. ITA NO.2716/2013 M/S BESCO LTD. 4 AS NO RETURN OF INCOME HAD BEEN/COULD BE FILED; THE ASSESSMENTS HAD TO BE COMPLETED UNDER BEST JUDGMENT U/S 144 OF THE INCOME TAX ACT. THUS, THE ASSESSING OFFICER HAD TO MANDATORILY PROC EED TO MAKE THE ASSESSMENTS UNDER BEST JUDGMENT U/S 144 OF THE INCOME TAX ACT. IN THE ASSESSMENT PROCEEDINGS, BOTH THE GROUPS /DIVISIONS SUBMITTED THEIR RESPECTIVE FINANCIALS AND DETAILS, AS ALSO THEIR PART INDEPENDENTLY AUDITED ACCOUNTS. THE AYS CONCERNED HER-E ALOE AFTER THE EXCHANGE OF MANAGEMENT - RATHER IN EFFECT, THE CROSS-EXCHANGE OF MANAGEMENT. IT IS PEST THE EXCHANGE OF THE MANAGEMENT THAT THE ALLEGATIONS/COU NTER ALLEGATIONS AGAINST EACH OTHER WERE LEVIED BY BOTH THE GROUPS BEFORE THE HON'BLE CLB. THIS HAS FURTHER STALLED TH E IMPLEMENTATION OF THE FAMILY SETTLEMENT. AS MENTIONED EARLIER, THE ALLEGATIONS PERTAIN TO MAINLY RECEIVABLES, INVENTORY, BANK LIAB ILITIES, HANK RECONCILIATIONS, ALLOCATION OF HEAD-OFFICE EXPENSES , ALLOCATION OF STATUTORY LIABILITIES. ETC. THE ONEROUS TASK BEFORE THE ASSESSING OFFICER WAS TO ATTEMPT TO CONSOLIDATE THE BROAD FIN ANCIALS OF BOTH THE GROUPS/DIVISIONS, AND, TO ATTEMPT TO ARRIVE AT THE NET PROFIT, I.E., TOTAL INCOME. THIS WAS A VERY DIFFICULT TASK AND TH EREFORE THE ASSESSING OFFICER HAD TO RESORT TO ESTIMATION OF TH E NET PROFIT; AND THE ASSESSMENT ALSO HAVING TO BE MADE UNDER BEST JU DGMENT. THE SYNOPSIS OF THE ASSESSMENTS IN CHRONOLOGICAL SE QUENCE, AND, THE ESTIMATION OF THE NET PROFIT ARE GIVEN IN THE T ABLE HEREUNDER: SL. AY SELECTIONS OF THE INCOME TAX ACT INVOKED (A) NET PROFIT SHOWN BY THE WAGON, AND, FOUNDRY DIVISIONS RESPECTIVELY. (B) BASIS OF ESTIMATION OF NET PROFIT, AND, THE PERCENTAGE APPLIED. (C) ASSESSED INCOME ASSESSMENT ORDER DATE (1) (2) (3) (4) (5) 1 AY 2007- 08 AS NO RETURN OF INCOME WAS FILED, NOTICE U/S.148 WAS ISSUED. NOTICES U/S.143(2), 142(1) ISSUED ASSESSED U/S.144 (A) WAGON DIVISION FOUNDRY DIVISION 0.86% (LOSS) (B) PRECEDING FY, I.E. F.Y.2005-06, AUDITED ACCOUNTS SHOWED NET PROFIT AT 1.17% OF THE NET SALES. TAKING CUE THEREFROM, THE ASSESSING OFFICER ESTIMATED THE COMBINED NET PROFIT AT 1.14% OF THE NET SALES, CONSIDERING THAT THE WAGON DIVISION WAS CLOSED FOR BRIEF PERIOD DURING THE YEAR (C) ASSESSED INCOME; RS.1,73,59,979/- 30.12.2010 1 AY 2008- 09 AS NO RETURN OF INCOME WAS FILED, NOTICE U/S.142 WAS ISSUED. NOTICES U/S.143(2), 142(1) ISSUED (A) WAGON DIVISION FOUNDRY DIVISION 3.46% (LOSS) (B) PRECEDING FY, I.E. F.Y.2005-06, ITA NO.2716/2013 M/S BESCO LTD. 5 ASSESSED U/S.144 AUDITED ACCOUNTS SHOWED NET PROFIT AT 1.17% OF THE NET SALES. TAKING CUE THEREFROM, THE ASSESSING OFFICER ESTIMATED THE COMBINED NET PROFIT AT 3.75% OF THE NET SALES, CONSIDERING THAT THE WAGON DIVISION WAS CLOSED FOR BRIEF PERIOD DURING THE YEAR (C) ASSESSED INCOME; RS.5,93,28,263/- 1 AY 2006- 07 AS NO RETURN OF INCOME WAS FILED, NOTICE U/S.148 WAS ISSUED. NOTICES U/S.143(2), 142(1) ISSUED. SPECIAL AUDIT U/S.142(2A) WAS REFERRED AND MADE; HOWEVER, BOTH THE OPT AND AKT GROUPS DISPUTED AND CHALLENGED THE AUDIT REPORT, AND THE ASSESSING OFFICER ALSO COULD NOT ACCEPT THE AUDIT REPORT AS PRESENTING TRUE AND FAIR PICTURE. ASSESSED U/S.144 (A) WAGON DIVISION FOUNDRY DIVISION 5.63% 9.82% (B) THE AVERAGE OF BOTH THE DIVISIONS IS AT 7.36%. THE ASSESSING OFFICER APPLIED ESTIMATION AT 10.50% OF THE COMBINED NET SALES. (C) ASSESSED INCOME; RS.8,73,39,031/- 30.12.2010 4 AY 2009- 10 AS NO RETURN OF INCOME WAS FILED, NOTICE U/S.148 WAS ISSUED. NOTICES U/S.143(2), 142(1) ISSUED. SPECIAL AUDIT U/S.142(2A) WAS REFERRED AND MADE; HOWEVER, BOTH THE OPT AND AKT GROUPS DISPUTED AND CHALLENGED THE AUDIT REPORT, AND THE ASSESSING OFFICER ALSO COULD NOT ACCEPT THE AUDIT REPORT AS PRESENTING TRUE AND FAIR PICTURE. ASSESSED U/S.144 (A) WAGON DIVISION FOUNDRY DIVISION 5.15% (LOSS) (B) THE AVERAGE OF BOTH THE DIVISIONS IS AT 2.79%. THE ASSESSING OFFICER APPLIED ESTIMATION AT 6.50% OF THE COMBINED NET SALES. (C) ASSESSED INCOME; RS.13,43,48,793/- 30.05.2012 5. AY 2010- 11 AS NO RETURN OF INCOME WAS FILED, NOTICE U/S.148 WAS ISSUED. NOTICES U/S.143(2), 142(1) ISSUED. ASSESSED U/S.144 (A) WAGON DIVISION FOUNDRY DIVISION 5.16% LOSS (B) A DIFFERENT APPROACH WAS ADOPTED THIS TIME. THE ASSESSING OFFICER PROCEEDED TO LOOK FOR COMPARABLE COMPANIES. THE ASSESSING OFFICER EXTRACTED FROM THE PROWESS DIGITAL DATABASE A LIST OF COMPANIES HAVING THE PARAMETERS OF WAGON AND FOUNDRY. THE PROWESS DATABASE SHOWED 9 COMPANIES. THE ASSESSING 31.03.2013 ITA NO.2716/2013 M/S BESCO LTD. 6 OFFICER DID NOT CONSIDER 8 COMPANIES AS BEING COMPARABLE TO BESCO. THE REMAINING ONE COMPANY WHICH WAS TITAGARH WAGONS LTD. WAS CONSIDERED AS COMPARABLE. THE NET PROFIT PERCENTAGE OF TITAGARH WAGONS LTD. SHOWN AT 16.46% WAS APPLIED AS THE ESTIMATION OF NET PROFIT FOR BESCO. (C) ASSESSED INCOME; RS.58,07,77,901/- 4. AGGRIEVED WITH THE ORDER OF AO, BOTH THE GROUPS HAVE FILED APPEALS BEFORE THE LD. CIT(A). LD. CIT(A) UPHELD THE REJECT ION OF BOOKS BY THE ASSESSING OFFICER (AO). THIS REJECTION OF BOOKS AND PASSING THE ORDER U/S.144 OF THE ACT BY THE AO AS UPHELD BY THE LD. C IT(A), HAS NOT BEEN CHALLENGED BY THE ASSESSEE. LD. CIT(A) WAS OF THE V IEW THAT THE ESTIMATION OF INCOME DONE BY THE AO IS EXCESSIVE. H E HELD THAT THE ASSESSEE HAS BEEN IN THE BUSINESS FOR THE LAST 75 Y EARS AND THE ACCOUNTS THAT IT PRESENTED IN THOSE YEARS, CAN BE RELIED UPO N AS TRUE AND CORRECT. HE DEVISED A FORMULA FOR ESTIMATION OF PROFIT. HENC E, HE ESTIMATED THE PROFIT BY GIVING 20% WEIGHTAGE TO THE ACCOUNTS OF T HE PREVIOUS YEAR ON THE PRECEDING YEARS AVERAGE, ASSESSED NET PROFIT PERCE NTAGE. FOR THE CURRENT YEARS ACCOUNT PRESENTED BY THE GROUP, LD. CIT(A) GA VE 80% WEIGHTAGE FOR THE NET PROFIT AS PER THE ACCOUNTS PRESENTED BY BOT H THE GROUPS FOR THE RELEVANT FINANCIAL YEARS. BY ADOPTING THIS FORMULA, LD. CIT(A) GRANTED PART RELIEF TO THE ASSESSEE. FOR THE ASSESSMENT YEAR 200 6-07, HE ACCEPTED THE INCOME DISCLOSED BY BOTH THE GROUPS PUT TOGETHER. F OR THE ASSESSMENT YEAR 2010-2011 THE AO USED THE DATA BASE OF THE PR OWESS AND IDENTIFIED COMPARABLES AND THEREAFTER ESTIMATED THE PROFIT OF THE ASSESSEE AT 16.46% BY TAKING A COMPARABLE OF TITAGARH WAGONS LTD. AFTER GIVING ITA NO.2716/2013 M/S BESCO LTD. 7 REASONS. LD. CIT(A) HAS REJECTED THIS COMPARABLE ON THE GROUND THAT THE SAME CANNOT BE USED FOR ESTIMATION OF PROFITS. HE D IRECTED THE AO TO ACCEPT THE NET PROFIT AS PER THE ACCOUNTS DISCLOSED BY THE ASSESSEE. BOTH PARTIES SUBMITTED THAT THE ONLY ISSUE BEFORE THE BE NCH IS AS TO WHETHER THE ESTIMATION OF PROFIT BY THE LD. CIT(A) IS REASONABL E OR NOT. 5. WE HAVE CAREFULLY CONSIDERED THE DETAILED ARGUM ENTS OF BOTH THE SIDES, WHICH WERE BASICALLY SUPPORTING AND OPPOSING THE ORDERS OF LD. CIT(A). 6. LD. DR STRONGLY CONTESTED THE FORMULA ADOPTED BY THE LD. CIT(A) AND SUBMITTED THAT THERE IS NO BASIS ON WHICH WEIGH TAGE OF 20% AND 80% WERE GIVEN TO THE PAST AND PRESENT ACCOUNTS SUBMITT ED BY THE ASSESSEE. HE PRAYED THAT THE ESTIMATION MADE BY THE AO BE RES TORED. 7. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUPPORTED THE ORDERS OF LD. CIT(A) AND SUBMITTED THAT THE AO ERRE D IN ESTIMATING THE PROFITS AT 10.50% FOR A.Y.2006-07, 1.14% FOR A.Y.20 07-08, 3.75% FOR A.Y.2008-09, 6% FOR A.Y.2009-10 AND 16.46% FOR A.Y. 2010-11, RESPECTIVELY. SHE SUBMITTED THAT MERE GLANCE OF THE SE VARIOUS PERCENTAGE OF NET PROFIT ADOPTED BY THE AO SHOWS THAT THERE IS INCONSISTENCY AND THE SAME WAS RECTIFIED BY THE LD. CIT(A). SHE RELIED ON THE ORDER OF LD. CIT(A) AND SUPPORTED THE SAME. 8. AFTER HEARING THE RIVAL CONTENTIONS, WE ARE OF T HE CONSIDERED VIEW THAT THE AO HAS ERRED IN ESTIMATING THE PROFITS OF VARIOUS YEARS IN THE MANNER IN WHICH HE HAS DONE. THERE SHOULD BE CONSIS TENCY IN THE PERCENTAGE OF PROFIT ADOPTED BY THE AO FOR THE PURP OSE OF ASSESSMENT. ITA NO.2716/2013 M/S BESCO LTD. 8 THE PERCENTAGE CANNOT VARY FROM 1.14% TO 16.46%. TH OUGH THE AO TRIED TO JUSTIFY SUCH VARIATION, WE DO NOT FIND ANY LOGIC IN SUCH AN ACTION. HENCE, WE DO NOT AGREE WITH THE SUBMISSIONS OF LD. DR ON T HIS ASPECT. WE UPHOLD THE DETAILED FINDING OF THE LD. CIT(A) ON THIS ASPE CT OF REJECTION OF THE ESTIMATION OF PROFIT BY THE AO. FOR THE SAKE OF BRE VITY, WE DO NOT REPEAT THESE FINDINGS. 9. COMING TO THE FORMULA ADOPTED BY THE LD. CIT(A), WE ARE UNABLE TO APPRECIATE AS TO HOW HE HAS COME TO A CONCLUSION TH AT 20% WEIGHTAGE SHOULD BE GIVEN FOR THE PAST DATA AND 80% WEIGHTAGE HAS TO BE GIVEN TO THE CURRENT YEARS DATA. THE FACT REMAINS THAT THE ASSESSEE HAS NOT COOPERATED EITHER WITH THE AUDITORS NOMINATED BY CO MPANY LAW BOARD(CLB) OR WITH THE AUDITOR NOMINATED BY THE HON BLE SUPREME COURT OR WITH THE AUDITOR NOMINATED U/S.142A BY THE INCOM E TAX AUTHORITIES. NO DETAILS WERE GIVEN AND NO DOCUMENTS WERE PRODUCED I N SUPPORT OF THEIR ACCOUNTS. THE COMPANY HAS NOT APPEALED AGAINST OR O BJECTED ANY OF THE CONCLUSION DRAWN BY THE AO FOR MAKING BEST JUDGMENT ASSESSMENT U/S.144 OF THE ACT. THE FINDINGS OF THE AO AS CONFI RMED BY THE LD. CIT(A) ARE THAT THE BOOKS OF ACCOUNT CANNOT BE RELIED UPON AND HENCE REJECTED. WHILE SO, WE DO NOT APPROVE OF THE LD. CIT(A) GIVIN G WEIGHTAGE OF 80% TO SUCH REJECTED BOOKS OF ACCOUNTS. 10. UNDER THESE CIRCUMSTANCES WE ARE OF THE CONSIDE RED OPINION THAT THE END OF JUSTICE SHOULD BE MET IF THE PROFIT IS E STIMATED AT THE PERCENTAGE WHICH IS AN AVERAGE OF ASSESSED NET PROFIT PERCENTA GE FOR THE SIX EARLIER ASSESSMENT YEARS I.E. A.YS.2000-01 TO 2005-06 I.E. BEFORE THE DISPUTE ITA NO.2716/2013 M/S BESCO LTD. 9 STARTED. SUCH AVERAGE NET ASSESSED PROFIT PERCENTAG E WORKS OUT TO 1.98%. WE DIRECT THE AO TO APPLY THE SAME FOR THE A.Y.2007 -08 AND 2008-09. 11. AS FAR AS THE ASSESSMENT YEARS 2006-07, 2009-10 & 2010-11 ARE CONCERNED, THE PROFITS ARRIVED AT AS PER THE BOOKS OF THE ASSESSEE ARE MORE THAN THE AVERAGE PERCENTAGE OF PROFIT OF 1.98% ADOPTED AND ARRIVED AT BY US BASED ON THE PAST DATA. AS THE ASSESSEE IS NOT IN APPEAL, WE CONFIRM THE FINDINGS OF THE FIRST APPELLATE AUTHORI TY FOR THESE THREE ASSESSMENT YEARS ON THE ISSUE OF ESTIMATION AS THE PROFIT PERCENTAGE ADOPTED IS MORE THAN 1.98%. 12. IN THE RESULT, APPEALS OF THE REVENUE FOR THE A .Y.2006-07, 2009-10 & 2010-11(I.E ITA NOS.2716, 2718 & 2720/KOL/2013) ARE DISMISSED AND APPEALS FOR A.Y.2007-08 & 2009-2010 (I.E ITA NOS.27 17 & 2719/KOL/2013) ARE ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26/ 04/2017. SD/ - (S.S.VISWANETHRA RAVI) SD/ - (J. SUDHAKAR REDDY) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 26/04/2017 & ()* /PRAKASH MISHRA , SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-DCIT,CC-XXX, KOLKATA 2. / THE RESPONDENT.-M/S BESCO LTD. 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//