Sri.M.Ayoob, Kannur V. DCIT, Calicut

ITA 29/COCH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2516 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 10-02-2012
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR
• Assessee Lawyers: VIJAYARAGHAVAN
• Keywords: Unexplained investment; Depreciation; Search and seizure; Revised return
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 23-29/COCH/2012 ASSESSMENT YEARS : 2002-03-2008-09 SHRI M. AYYOOB, M.R.A. BAKERY, PANOOR, (VIA) THALASSERY, KANNUR. [PAN: ACPPA 8234K] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, CALICUT. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI M.R. VIJAYARAGHAVAN, CA REVENUE BY SHRI M. ANIL KUMAR, CIT(DR) DATE OF HEARING 02/04/2013 DATE OF PRONOUNCEMENT 28/06/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THESE APPEALS, FILED BY THE ASSESSEE, ARE DIRECTED AGAINST THE COMMON ORDER DATED 28-11-2011 PASSED BY THE LD. CIT(A)-I, KOCHI AND THEY RELATE TO THE ASSESSMENT YEARS 2002-03 TO 2008-09. SINCE THE ISSUES CONTEST ED IN THESE APPEALS ARE ARISING OUT OF THE COMMON SET OF FACTS, THEY WERE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ALL THESE YEARS, THE ASSESSEE IS AGGRIEVED WI TH THE NET PROFIT DETERMINED BY THE LD. CIT(A). 3. THE FACTS RELATING TO THE CASE ARE STATED I N BRIEF. THE ASSESSEE IS A MANUFACTURER AND DEALER OF BAKERY PRODUCTS LIKE SWEETS, BISCUITS ETC. HE IS THE PROPRIETOR OF TWO SHOPS LOCATED IN PANOOR AND POOKKAM. HE IS ALSO ON E OF THE PARTNERS OF THE TWO OTHER SHOPS LOCATED AT TELLICHERRY. ALL THE SHOPS HAVE C OMMON NAME, VIZ., M.R.A. BAKERY. HIS WIFE SMT. HAIRUNNISSA IS THE PROPRIETARY OF M/ S M.R.A. AYURVEDIC PRODUCTS. THE I.T.A. NOS. 23-29/COCH/2012 2 DEPARTMENT CARRIED OUT SEARCH AND SEIZURE OPERATION S IN THE HAND OF THE ASSESSEE ON 30-05-2007. DURING THE COURSE OF SEARCH, A SWORN S TATEMENT U/S. 132(4) OF THE ACT WAS RECORDED. IN THE SAID DEPOSITION, THE ASSESSEE DIS CLOSED THE DETAILS OF AVERAGE DAILY SALES FOR M/S. M.R.A. BAKERY AND ALSO FOR M/S M.R.A . AYURVEDIC PRODUCTS. HE FURTHER SUBMITTED THAT HE IS HAVING FULL CONTROL OVER HIS W IFES CONCERN NAMED M/S M.R.A. AYURVEDIC PRODUCTS ALSO. CONSEQUENT TO THE SEARCH, THE ASSESSEE FILED HIS RETURN OF INCOME U/S. 153A OF THE ACT DISCLOSING ADDITIONAL I NCOME FROM HIS BUSINESS. IN THE SAID RETURN, THE ASSESSEE ALSO INCLUDED THE INCOME OF TH E CONCERN BELONGING TO HIS WIFE M/S M.R.A. AYURVEDIC PRODUCTS ALSO, SINCE HE HAD STATE D IN THE SWORN STATEMENT THAT HE IS HAVING CONTROL OVER THE SAID CONCERN. DURING THE C OURSE OF DEPOSITION, THE ASSESSEE ALSO ADMITTED THAT HE IS NOT MAINTAINING PROPER BOO KS OF ACCOUNTS FOR ALL THE BUSINESSES. HENCE THE AO REJECTED THE BOOK RESULTS AND PROCEEDE D TO ESTIMATE THE INCOME FOR ALL THE YEARS UNDER CONSIDERATION. 4. FOR THE PURPOSES OF ESTIMATING INCOME, THE AO DE TERMINED THE ANNUAL TURNOVER AND THE RATE OF GROSS PROFIT. FOR DETERMINING THE ANNUAL TURNOVER, THE ASSESSING OFFICER PLACED RELIANCE ON THE SWORN STATEMENT GIVEN BY THE ASSESSEE U/S 132(4) OF THE ACT, WHEREIN HE HAD DEPOSED ABOUT THE AVERAGE DAILY SALE S ACHIEVED IN HIS BUSINESS CONCERNS. ACCORDINGLY, THE ASSESSING OFFICER DETE RMINED THE SALES TURNOVER OF M/S. M.R.A. BAKERY AT RS.1,23,00,000/- (41,000X300 DAYS) . SIMILARLY, FOR M/S. M.R.A. AYURVEDIC PRODUCTS THE SALES TURNOVER WAS ESTIMATED AT RS.1,20,00,000/- (40,000 PER DAY X 300 DAYS). THUS, THE TOTAL AGGREGATE TURNOVER WAS DETERMINED AT RS. 2,43,00,000/- AND THE ASSESSING OFFICER ASSIGNED TH E SAME FOR THE ASSESSMENT YEAR 2007-08. FOR THE PRECEDING YEARS, THE ASSESSING OF FICER DETERMINED THE TURNOVER BY REDUCING 10% EVERY YEAR CONSECUTIVELY. FOR THE SUC CEEDING ASSESSMENT YEARS, I.E., ASSESSMENT YEAR 2008-09, THE ASSESSING OFFICER ENHA NCED THE ABOVE SAID TURNOVER BY 10%. THE ASSESSING OFFICER ADOPTED THE GROSS PROF IT RATE DISCLOSED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS FOR EVERY YEAR AND APPLIED TH E SAME TO THE ON THE TURNOVER OF THE CORRESPONDING YEAR DETERMINED IN THE MANNER STATED ABOVE. THE DIFFERENCE BETWEEN THE GROSS PROFIT SO ESTIMATED AND THAT OFFERED BY T HE ASSESSEE WAS ADDED TO THE TOTAL INCOME RETURNED BY THE ASSESSEE IN THE RETURNS OF I NCOME FILED U/S. 153A OF THE ACT. I.T.A. NOS. 23-29/COCH/2012 3 5. THE GIST OF THE ADDITIONS MADE IN EACH OF THE AS SESSMENT YEAR IS TABULATED BY THE LD. CIT(A) AS UNDER: 1 AY 2 ESTIMATED ANNUAL TURNOVER BY THE AO 3 GP RATE % 4 ESTIMATED GP A 5 ADMITTED GP IN THE ORIGINAL RETURN B 6 ADMITTED ADDITIONAL INCOME IN THE REVISED RETURNS IN RS. C 7 ASSESSED UNDISCLOSED INCOME IN RS. (A-(B+C)) 2008-09 2,67,30,000/- NET PROFIT RATE @27.8 AS ASSESSED IN ASSESSMENT YEAR 2006- 07 74,52,324 NIL 5,54,500 @ 68,97,824 2007-08 2,43,00,000/- NET PROFIT RATE @27.8 AS ASSESSED IN ASSESSMENT YEAR 2006- 07 67,55,400 NIL 13,11,850@ 54,43,550 2006-07 2,18,70,000/- 27.33 59,77,071 5,64,340 3,66,980@ 50,45,751 2005-06 1,96,83,000/- 20.8 39,53,000 4,22,310 4,97,645@ 31,73,202 2004-05 1,77,14,700/- 20 35,42,940 4,97,645 1,69,550@ 28,75,745 2003-04 1,59,48,230/- 19.24 30,67,477 4,40,293 3,60,100@ 22,67,084 2002-03 1,43,48,907/- 17.34 24,88,100 4,63,742 5,56,546@ 14,68,812 TOTAL ASSESSED UNDISCLOSED INCOME 2,71,71,968 6. IN THE APPELLATE PROCEEDING BEFORE LD CIT(A), TH E ASSESSEE SUBMITTED THAT THE CONCERN M/S M.R.A. AYURVEDIC PRODUCTS SUPPLIES SOME OF ITS PRODUCTS TO M/S M.R.A. BAKERY. ACCORDINGLY IT WAS SUBMITTED THAT THE TURN OVER OF M/S M.R.A. BAKERY INCLUDES TURNOVER FROM THE PRODUCTS SUPPLIED M/S M.R.A. AYUR VEDIC PRODUCTS. ACCORDINGLY, IT WAS CONTENDED THAT THE AO DID NOT CONSIDER THIS IMPORTA NT POINT AND HENCE HAS RESULTED IN DUPLICATION OF THE SAME TURNOVER IN THE HANDS OF BO TH M/S M.R.A. BAKERY AND M/S M.R.A. AYURVEDIC PRODUCTS. THE LD. CIT(A) ACCEPTED THE SAID CLAIM OF THE ASSESSEE I.T.A. NOS. 23-29/COCH/2012 4 AND ACCORDINGLY REDUCED THE TURNOVER IN RESPECT OF M/S. M.R.A. AYURVEDIC PRODUCTS. HOWEVER, HE SUSTAINED THE TURNOVER ESTIMATED BY THE AO FOR M/S. M.R.A. BAKERY. THE TURNOVER SUSTAINED BY THE LD. CIT(A) FOR VARIOUS YE ARS ARE TABULATED BELOW: A.Y TURNOVER SUSTAINED FOR MRA BAKERY TURNOVER SUSTAINED FOR MRA AYURVEDIC PRODUCTS TOTAL TURNOVER SUSTAINED IN THIS APPEAL 2002-03 65,36,724 47,29,800 1,12,66,525 2003-04 72,63,027 52,55,100 1,25,18,127 2004-05 80,70,030 58,39,200 1,39,09,230 2005-06 89,66,700 64,88,100 1,54,54,800 2006-07 99,63,000 72,09,000 1,71,72,000 2007-08 1,10,70,000 80,10,000 1,90,80,000 2008-09 1,23,00,000 88,11,000 2,11,11,000 7. THE LD. CIT(A) NOTICED THAT THE AO HAD ADOPTED T HE RATE OF G.P. DISCLOSED IN THE BOOKS OF ACCOUNT. SINCE THE ASSESSEE HIMSELF HAD S TATED THAT THE BOOKS OF ACCOUNTS MAINTAINED BY HIM ARE NOT PROPER AND FURTHER SINCE THE AO HIMSELF HAS REJECTED THE BOOKS OF ACCOUNT, THE LD CIT(A) HELD THAT THE ASSES SING OFFICER WAS NOT RIGHT IN ADOPTING HE GP RATE DISCLOSED IN THE BOOKS OF ACCOU NT. THE FIRST APPELLATE AUTHORITY ALSO DID NOT AGREE WITH THE APPROACH OF THE ASSESSING OF FICER IN ESTIMATING THE GROSS PROFIT. SINCE IT WAS NOTICED THAT THE ASSESSEE DI D NOT MAINTAIN PROPER BOOKS OF ACCOUNTS AND ALSO DID NOT ACCOUNT FOR EXPENDITURES ALSO PROPERLY, THE LD. CIT(A) HELD THAT IT WOULD BE APPROPRIATE TO ESTIMATE THE NET PR OFIT FOR EACH OF THE YEAR, IN THE FACTS AND CIRCUMSTANCES OF THE IN THE INSTANT CASE. 8. FOR DETERMINING THE RATE OF NET PROFIT THAT SHOU LD BE ADOPTED FOR DETERMINING THE INCOME OF THE ASSESSEE, THE LD. CIT(A) COONSIDERED (A) THE NET PROFIT RATE COMPUTED ON THE BASIS OF IN COME DISCLOSED BY THE ASSESSEE IN THE RETURNS OF INCOME FILED BY HIM U/S. 153A OF THE ACT OVER THE TURNOVER DETERMINED BY THE LD CIT(A). I.T.A. NOS. 23-29/COCH/2012 5 (B) THE RATE OF NET PROFIT ESTIMATED BY THE DEPARTM ENT IN OTHER COMPARABLE CASES. IN THIS REGARD, THE LD CIT(A) CONSIDERED THE DECISION RENDERED IN THE RELATED PARTIES CASES VIZ., SRI ABDUL GADHAFI AND S MT. THASLEENA P.P. ON CONSPECTUS OF THE MATTER, THE LD. CIT(A) DETERMI NED THE RATE OF NET PROFIT AT 8% AND ACCORDINGLY, DIRECTED THE ASSESSING OFFICER TO DETERMINE THE INCOME BY APPLYING THE SAID RATE ON THE TURNOVER DETERMINED BY HIM. STILL AGGRIEVED, THE ASSESSEE HAS FILED THESE APPEALS BEFORE US. IT APPEARS THAT THE REVEN UE HAS ACCEPTED THE ORDERS PASSED BY LD CIT(A) AND HENCE WE ARE REQUIRED TO ADJUDICAT E THE APPEALS FILED BY THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WE NOTICE THAT THE LD. CIT(A) HAS DETERMINED THE RATE OF NET PROFIT AND ALSO COMPUTED THE NET PROFIT WITH THE FOLLOWING OBSERVATIONS:- 5.5.4 HAVING DECIDED THAT NET PROFIT RATE ADDITION WOULD BE CORRECT COURSE IN THIS CASE, THE NEXT ASPECT THAT REQUIRES TO BE DECIDED I S WHAT SHOULD BE THE NET PROFIT RATE. IT IS SETTLED LAWN THAT EVEN IF BOOK RESULTS ARE REJECTED, THE ASSESSING OFFICER IS DUTY-BOUND TO MAKE A FAIR AND REASONABLE ESTIMAT E OF INCOME BASED ON EVIDENCE AND MATERIAL ON RECORD. HE IS EXPECTED TO MAKE BEST JUDGMENT ASSESSMENT. NO DOUBT, THE ESTIMATION OF INCOME INV OLVES CERTAIN AMOUNT OF GUESS WORK BUT SUCH GUESSWORK HAS TO BE REASONABLE AND FA IR AND CANNOT BE ARBITRARY AND CAPRICIOUS. RELIANCE IN THIS REGARD IS PLACED ON THE JUDGMENT OF PRIVY COUNCIL IN THE CASE OF CIT VS. LAXMINARAIN BADRIDAS (1937) 5 ITR 170 (PC). 5.5.5 FOR THE PURPOSE OF ESTIMATING INCOME, THE ASSESSING OFFICER CAN REFER TO THE PAST HISTORY OF THE CASE WHICH ACTS S A GOOD GU IDE FOR DETERMINATION OF THE INCOME. THE ASSESSING OFFICER CAN ALSO REFER TO TH E COMPARATIVE CASES TO SEE WHETHER THE RATE SHOWN BY THE APPELLANT IS FAIR AND REASONABLE. HOWEVER, COMPARISON WITH OTHER CASES MUST TAKE INTO ACCOUNT THE TOTAL TURNOVER, THE FAVOURABLE OR UNFAVOURABLE CONDITION OF THE ASSESSE E VIS--VIS COMPARABLE CASES, ETC. 5.5.6 IF A REFERENCE TO THE PAST HISTORY OF TH E APPELLANT IS MADE, HIS BOOK RESULTS CANNOT BE RELIED UPON FOR THE SIMPLE REASON THAT THEY WERE SHOWING UNRELIABLE RESULTS WHEREIN NET PROFIT RATE ROSE FRO M 4.55% IN ASSESSMENT YEAR 2002-03 ROSE TO 5.68 IN ASSESSMENT YEAR 2004-05 AN D BUT FELL TO 5.01 IN A.Y. 2005-06 WHICH ONCE AGAIN ROSE TO 10.40% IN ASSESSME NT YEAR 2006-07. FURTHER, THE BOOK RESULTS CANNOT BE RELIED UPON FOR THE SIMP LE REASON THAT THEY WERE SHOWING ERRATIC RESULTS WHEREIN ADMITTED TURNOVER W AS RS.26,73,286, RS.22,87,986, RS.24,87,893, RS.21,02,785, RS.20,64 ,570 FOR ASSESSMENT YEARS I.T.A. NOS. 23-29/COCH/2012 6 02-03, 03-04, 05-06, 06-07 RESPECTIVELY, INDICATING CONTINUOUS FALL BUT FOR ASSESSMENT YEAR 2004-05. THE APPELLANT HAS NOT FUR NISHED TURNOVER AMOUNT FOR ASSESSMENT YEAR 2007-08 AND 08-09, I.E., FOR THE PE RIOD RELEVANT TO THE SEARCH AND SEIZURE AND ITS IMMEDIATE PREVIOUS YEAR BUT FILED C ASH FLOW STATEMENTS ONLY FOR THESE ASSESSMENT YEARS. THUS, IT IS CLEAR THAT NEITHER THE TURNOVER NOR THE GP RATE OR THE NET PROFIT RATE SHOWN IN THE APPELLA NTS ORIGINAL BOOKS OF ACCOUNT IS RELIABLE. HOWEVER, THE NET PROFIT DECLARED BY THE APPELLANT IN THE REVISED RETURNS ON THE BASIS OF CASH FLOW STATEMENT WAS ON MUCH SOUND FOOTINGS THAN AN ARBITRARY ESTIMATION OF INCOME MADE BY THE ASSESSING OFFICER. IF NET PROFIT DECLARED BY THE APPELLANT ON THE BASIS OF CASH FLOW STATEMENT WITH DUE CREDIT FOR THE OMISSIONS IN ASSESSMENT YEAR 2006-07, THE ADDI TION OF RS.24,888/- ON UNDISCLOSED INCOME FROM UAE SHOP AND RS.6,31,200/- T OWARDS UNEXPLAINED INVESTMENTS IN UAE SHOP, IS CONSIDERED WITH REFERENC E TO THE TURNOVER ESTIMATED BY THE ASSESSING OFFICER AND AS MODIFIED AND UPHELD IN THE PROCEEDINGS, THE NET PROFIT RATE WORKS OUT TO 2.24% TO 7.28% IN ASSESSME NT YEARS 2006-07 AND 07-08 AS IN THE NEXT PAGE. A.Y. ADMITTED TURNOVER IN ORIGINAL BOOKS (RS.) ADMITTED NET PROFIT IN ORIGINAL BOOKS (RS.) ADMITTED NET RATE IN % TOTAL TURNOVER AS UPHELD IN THIS APPEAL PROCEEDINGS (RS.) MRA BAKERY PANOORS REVISED INCOME AFTER DEPRECIATION (RS.) NET PROFIT RATE RS. E/D X 100 (RS.) A B C D E F 2002-03 26,73,286 1,21,488 4.55 1,12,66,500 6,89,909 6.12 2003-04 22,87,986 1,15,093 5,03 1,25,18,100 4,75,193 3.79 2004-05 24,87,898 1,41,388 5.68 1,39,09,200 3,1,279 2.24 2005-06 21,02,785 1,05,432 5.01 1,54,54,800 4,62,910 2.99 2006-07 20,64,570 2,14,510 10.40 1,71,72,000 12,50,988@ 7.28 2007-08 NOT FURNISHED NOT FURNISHED NOT APPLICABLE 1,90,80,000 13,71,848 7.19 2008-09 NOT FURNISHED NOT FURNISHED NOT APPLICABLE 2,11,11,000 5,38,858 2.55 @APPELLANT ADMITTED ADDITIONAL INCOME IN THE REVISE D RETURN AT RS. 5,94,900 ONLY HOWEVER, THE ADDITION OF RS. 24,888/- TOWARDS UNDIS CLOSED INCOME FROM UAE SHOP AND RS. 6,31,200/- TOWARDS UNEXPLAINED INVESTMENTS IN UAE SHOP WHICH ARE NOT APPEALED ARE ADDED TO IF FIND OUT THE NET PROFIT RA TE. 5.5.7 THE NEXT TEST IS A REFERENCE TO THE COMPARATI VE CASES TO SEE WHETHER THE RATE SHOWN BY THE APPELLANT IS FAIR AND REASONABLE. HOWEVER, COMPARISON WITH OTHER CASES MUST TAKEN INTO ACCOUNT THE TOTAL TURNO VER, THE FAVOURABLE OR I.T.A. NOS. 23-29/COCH/2012 7 UNFAVOURABLE CONDITIONS OF THE ASSESSEE VIS--VIS C OMPARABLE CASES, ETC. IN THIS CASE, AS ALREADY POINTED OUT BY THE AR, THERE ARE T WO RELATED PARTIES CARRYING AN IDENTICAL BUSINESS OF RUNNING OF BAKERY VIZ. SRI AB DUL GADHAFI AND SMT. THASLEENA P.P. IN WHOSE CASES MY PREDECESSOR HAS HELD THAT NE T PROFIT RATE OF 11% AND 5% RESPECTIVELY, SHOULD BE ADOPTED ON ESTIMATED SALES TURNOVER IN I.T.A. NO. C- 244/CIT(A)-I/09-10 & IN I.T.A. NO. C-344/CIT(A)-I/0 9-10 DATED 25 TH NOVEMBER 2010. IT IS PLEADED THAT SRI ABDUL GADHAFIS CASE IS DISTINGUISHABLE. ASSUMING THE PLEA IS RIGHT AND TAKING INTO ACCOUNT THE CERTIFICA TE OF THE BAKERY OWNERS ASSOCIATION (WHICH WAS FURNISHED BY ONE OF THE APPE LLANTS RELATED PERSON OF THIS GROUP) THAT THERE IS A PRICE DIFFERENCE OF APPROXIM ATELY 20% IN SELLING RATES FOR BAKERY PRODUCTS IN TOWN AREA AND RURAL AREAS OF KAN NUR DISTRICT, IF CREDIT OF 20% RELIEF IS GIVEN TO 11% OF THE NET PROFIT RATE UPHEL D BY THE CIT(A) IN THAT CASE, THE RESULTANT NET PROFIT RATE COMES TO 8.8%. SINCE THE AVERAGE NET PROFIT RATE ADMITTED IN THE APPELLANTS CASE JUST BEFORE THE SE ARCH AND SEIZURE PERIOD ,I.E., IN ASSESSMENT YEARS 2006-07 AND 07-08, IS ABOVE 7%, TH E RATIO LAID IN THE CASE OF SMT. THASLEENA P.P. BY THE CIT(A) IS NOT APPLICABLE TO THIS CASE. IN THE CASE OF SHRI M. MOHAMMED BASED ON HIS WIFE SMT. KP ZEENA THS APPEAL PROCEEDINGS THE CIT(A)-I, KOCHI DECIDED THAT THE AV ERAGE NET PROFIT RAT AT 9.54%. THE CASES QUOTED BY THE ASSESSING OFFICE R IN 4.2.6 ARE NOT APPLICABLE TO THIS CASE. IN THE LIGHT OF THESE FAC TS AND CIRCUMSTANCES THE ASSESSING OFFICER WAS NOT JUSTIFIED IN APPLYING THE GP/NP RATE BASED ON A UNRELIABLE BOOKS. THUS, THE APPELLANT HAS MADE O UT A CASE THAT (I) THE RATE OF GROSS PROFIT ADOPTED BY THE ASSESSING OFFIC ER IS WRONG, EXCESSIVE AND BASED ON A UNRELIABLE AND UNDEPENDABLE BOOKS. THUS, THE A PPELLANT HAS MADE OUT A CASE THAT (I) THE RATE OF GROSS PROFIT ADOPTED BY THE O IS WRONG, EXCESSIVE AND BASED ON A UNRELIABLE AND UNDEPENDABLE DOCUMENT OR RECORD OR DATA, THE ASSESSMENT OF GROSS PROFIT ON TURNOVER AS INCOME IS INCORRECT AND ONLY NET PROFIT FROM BUSINESS HAS TO BE ASSESSED AS INCOME AND (II) THE RATE OF NET PROFIT ASSESSED BY THE ASSESSI NG OFFICER IS UNREASONABLE AND FOR HIGHER THAN THE RATE OF NET PROFIT RAISED BY HIM IN THE CASES OF OTHER ASSESSEES IN THE SAME GROUP OF PERSONS AND DOING SIMILAR BUSINES S OR DEALING IN THE SAME NATURE OF GOODS. THE NET PROFIT ASSESSED IS FAR HIG HER THAN THE RATE DISCLOSED BY OTHER ASSESSEES DOING SIMILAR BUSINESS IN THE LOCAL ITY 6. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTAN CES OF THIS CASE, THE NET PROFIT RATES SHOWN BY THE APPELLANT IN THE REVISED RETURNS ARE CONSIDERED AS UNFAIR AND UNREASONABLE. THE REASONABLE AND JUSTIFIABLE N ET PROFIT RATE THAT IS REQUIRED TO BE ADOPTED IN THE APPELLANTS CASE IS DETERMINED AT 8.00% FOR THE REASON THAT THE PEAK NET PROFIT RATE WORKED OUT ON THE BASIS OF APP ELLANTS REVISED INCOME FOR ASSESSMENT YEAR 2006-07 AND 07-08 ARE ABOVE 7%. CO NSIDERING THAT THE APPELLANT IS A MANUFACTURER CUM TRADER AND TAKING I NTO ACCOUNT HIS HUGE TURNOVER VIS--VIS OTHER MEMBERS OF THIS GROUP, THE APPELLAN TS TURNOVER ITSELF COULD LOWER HIS NET PROFIT RATE CONSIDERABLY WHEN COMPARED WITH THE CASES OF SHRI ABDUL GADHAFI, SHRI M. MOHAMMED AND SMT. K.P. ZEENATH. H ENCE, THE NET PROFIT RATE @ 8% SHOULD BE ADOPTED ON THE ESTIMATED TURNOVER AS U PHELD IN THIS PROCEEDINGS FOR I.T.A. NOS. 23-29/COCH/2012 8 THE IMPUGNED ASSESSMENT YEARS. SUCH WORKING IS MAD E BELOW TO INDICATE THE AMOUNT TO ADDITION SUSTAINED FOR THE DIFFERENT ASSE SSMENT YEARS IN THESE APPEAL PROCEEDINGS. 10. BEFORE US, THE LD COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE RATE OF NET PROFIT DETERMINED BY LD CIT(A) IS ON THE HIGHER SIDE, PARTICULARLY IN VIEW OF THE FACT THAT THE CONCERN M/S M.R.A. AYURVEDIC PRODUCTS IS S UPPLYING ITS PRODUCTS TO M/S M.R.A. BAKERY. HOWEVER, WE ARE INCLINED TO REJECT THE SAI D CONTENTIONS FOR THE FOLLOWING REASONS:- (A) THE LD CIT(A) HAS ALREADY REDUCED THE TURNOVER OF THE CONCERN M/S M.R.A. AYURVEDIC PRODUCTS. (B) THE INCOME DISCLOSED BY THE ASSESSEE IN THE RE TURNS OF INCOME FILED U/S 153A OF THE ACT ALSO INCLUDES THE INCOME RELATING T O M/S M.R.A. AYURVEDIC PRODUCTS. THE LD CIT(A) HAS USED THE COMBINED INCO ME OF ALL THE CONCERNS TO DETERMINED THE RATE OF NET PROFIT. HENCE THE CLAIM OF THE ASSESSEE ABOUT THE LOW PROFIT IN M/S M.R.A. AYURVEDIC PRODUCTS IS AUTOMATI CALLY TAKEN CARE OFF. 11. WE HAVE ALREADY NOTICED THAT THE REVENUE HAS NOT FILED APPEALS CHALLENGING THE ORDER PASSED BY LD CIT(A). ON A CAREFUL PERUSAL OF THE ORDER PASSED BY LD CIT(A), WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER. ACCORDINGLY, WE AFFIRM HIS ORDER IN ALL THE YEARS. 12. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 28-06-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 28TH JUNE, 2013 GJ I.T.A. NOS. 23-29/COCH/2012 9 COPY TO: 1. SHRI M. AYYOOB, M.R.A. BAKERY, PANOOR, (VIA) THA LASSERY, KANNUR. 2.THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE-2, CALICUT. 3 THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCHI. 4.THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN