Roxy Exports Ltd, Ludhiana V. DCIT, Ludhiana

ITA 433/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80870 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-11-2013
• Assessment Year: 1996-1997
• Appeal Filed On: 22-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: RAKESH JAIN
• Keywords: Rejection of books of accounts; Opportunity of being heard
• Section: 143(3); 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 433 & 434/CHD/2013 ASSESSMENT YEARS : 1996-97 & 1995-96 M/S ROXY EXPORTS LTD., VS THE DY. COMMISSIONE R OF (EARLIER ROXY ENGG.PVT.LTD.), INCOME TAX, C-116, FOCAL POINT CC-II, LUDHIANA. LUDHIANA. PAN : AABCR4409G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH JAIN RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 20.08.2014 DATE OF PRONOUNCEMENT : 10.09.2014 O R D E R PER SUSHMA CHOWLA, JM BOTH THE APPEALS FILED BY THE SAME ASSESSEE ARE DI RECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, LUDHIANA DATED 22.02.2013 RELATING TO ASSESSMENT YE ARS 1996-97 AND 1995-96 RESPECTIVELY AGAINST THE ORDER PASSED U NDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE A CT'). 2. THE ISSUE RAISED IN BOTH THE APPEALS IS IDENTICA L AND WE PROCEED TO THE DECIDE THE APPEALS BY THIS CONSOLIDA TED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE FACTS OF BOTH THE APPEALS ARE IDENTICAL. HO WEVER, REFERENCE IS BEING MADE TO THE FACTS IN ITA NO. 434 /CHD/2013 RELATING TO ASSESSMENT YEAR 1995-96 TO ADJUDICATE T HE ISSUE. 2 4. IN ITA NO. 434/CHD/2013, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. BECAUSE THE ACTION FOR REJECTING THE BOOK RESUL TS U/S 145 AND UPHOLDING THE ADDITION FOR RS. 3,63,499/- ON ACCOUN T OF AVERAGE GROSS PROFIT RATE IS BEING CHALLENGED ON FACTS AND LAW. (B) THE QUANTUM & RATE OF ADDITION IS BEING C ONTESTED TOO. 2. BECAUSE THE ACTION FOR REJECTING THE PRAYER FOR ALLOWING THE CLAIM U/S 80IA @ 30% IS BEING CHALLENGED. 5. THE LD. AR FOR THE ASSESSEE AT THE OUTSET POINTE D OUT THAT GROUND OF APPEAL NO. 2 RAISED IN BOTH THE APPEALS I S NOT PRESSED AND HENCE, THE SAID GROUND OF APPEAL RAISED IN ITA NO. 434/CHD/2013 AND 433/CHD/2013 ARE DISMISSED AS NOT PRESSED. 6. THE ONLY ISSUE REMAINING FOR ADJUDICATION IS AGA INST THE REJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145 OF THE ACT AND APPLICATION OF GROSS PROFIT RATE. 7. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINA L ASSESSMENT IN THE CASE WAS COMPLETED VIDE ORDER DATED 31.03.19 98 AT ASSESSED INCOME OF RS. 38,40,340/- AGAINST RETURNED INCOME O F RS. 4,82,770/-. THE ADDITIONS WERE MADE IN THE HANDS O F THE ASSESSEE AFTER REJECTING THE BOOKS OF ACCOUNT AND ON ACCOUNT OF SALES OUTSIDE THE BOOKS OF ACCOUNT AND DISALLOWANCE OF CO MMISSION ON SALES AMOUNTING TO RS. 39 LACS AND RS. 4,62,593/- R ESPECTIVELY. 8. THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE FIRST ROUND OF APPEAL VIDE ORDER DATED 30.03.2009 DELETED THE ADDITION ON ACCOUNT OF SALES OUTSIDE THE BOOKS OF ACCOUNT AN D CONFIRMED THE OTHER ADDITIONS IN VIEW OF THE ORDER OF COMMISS IONER OF INCOME TAX (APPEALS) RELATING TO ASSESSMENT YEAR 19 94-95. THEREAFTER, CROSS APPEALS WERE FILED BEFORE THE TRI BUNAL BOTH BY 3 THE ASSESSEE AND THE REVENUE AND THE TRIBUNAL SET A SIDE THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) ON ACCOUNT OF ADDITION DELETED ON SIMILAR LINES RELATING TO ASSESSMENT YEA R 1994-95. THEREAFTER, THE COMMISSIONER OF INCOME TAX (APPEALS ) VIDE ORDER DATED 12.02.2004 DELETED ALL THE ADDITIONS MADE BY THE ASSESSING OFFICER IN VIEW OF THE ORDER PASSED RELATING TO ASS ESSMENT YEAR 1994-95. THE TRIBUNAL VIDE ORDER DATED 22.09.2005 DIRECTED THE ASSESSING OFFICER TO DETERMINE THE REASONABLE RATE OF PROFIT TO BE APPLIED ON THE DECLARED SALES. THE ASSESSING OFFIC ER IN THE PROCEEDINGS, THEREAFTER APPLIED AVERAGE GP RATE OF 17% AS AGAINST GP RATE OF 12.98% SHOWN BY THE ASSESSEE. 9. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), WRITTEN SUBMISSIONS WERE FILED BY THE ASSESSEE WHICH ARE RE PRODUCED UNDER PARA 3 AT PAGES 5 TO 11 OF THE APPELLATE ORDE R. THE COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE RATE TO BE APPLIED TO 14.64% BEING THE AVERAGE OF GP RATE SHOW N IN THE SUCCEEDING YEARS. BY APPLYING THE SAID GP RATE OF 14.64% TO THE TURNOVER OF 3.93 CRORES, THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION OF RS. 3,63,499/- AGAINST WHICH THE ASSESSEE IS IN APPEAL. 10. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT TH E TRIBUNAL WHILE SETTING ASIDE THE ISSUE BACK TO THE FILE OF A SSESSING OFFICER HAD DIRECTED THE ASSESSING OFFICER TO WORK OUT THE GP RATE TO BE APPLIED IN THE HANDS OF THE ASSESSEE AND THE ASSESS ING OFFICER WHILE GIVING EFFECT TO THE ORDER OF TRIBUNAL HAD AP PLIED GP RATE OF 17% WHICH THE COMMISSIONER OF INCOME TAX (APPEAL S) HAD REDUCED TO 14.64%. IT WAS FAIRLY POINTED OUT BY TH E LD. AR FOR THE ASSESSEE THAT IN THE SUCCEEDING YEAR, THE ASSESSEE HAD DECLARED GP 4 RATE OF 12.98% AGAINST WHICH THE ASSESSING OFFICER HAD APPLIED GP RATE OF 17% AND THE COMMISSIONER OF INCOME TAX ( APPEALS) HAD RESTRICTED THE SAME TO 14.64%. 11. THE LD. AR FOR THE ASSESSEE DID NOT RAISE ANY O BJECTION AGAINST THE REJECTION OF BOOKS OF ACCOUNT BUT ONLY WAS AGGRIEVED BY THE RATE TO BE APPLIED WHILE DETERMINING THE INC OME IN THE HANDS OF THE ASSESSEE. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PRESENT APPEAL IS INSTITUTED PURSUANT TO THE DI RECTIONS OF THE TRIBUNAL IN ITA NO. 346, 515 AND 616/CHD/2004 RELAT ING TO ASSESSMENT YEARS 1994-95, 1995-96 AND 1996-97, ORDE R DATED 22.09.2005. THE ISSUE WAS RESTORED BACK TO THE FIL E OF ASSESSING OFFICER FOR THE LIMITED PURPOSE OF DETERMINING THE GP RATE TO BE APPLIED. THE TRIBUNAL OBSERVED THAT THE AVERAGE GR OSS RATE OF 18.6% WOULD BE REASONABLE UNLESS THE ASSESSEE ESTAB LISH THAT LOWER RATE OF PROFIT WOULD BE JUSTIFIED IN HIS CASE . FOR THE LIMITED PURPOSE, THE ORDER WAS SET ASIDE TO THE FILE OF ASS ESSING OFFICER. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER : 'THE NEXT QUESTION THAT ARISES FOR OUR CONSIDERATIO N IS ABOUT THE QUANTUM AND THE BASIS FOR ADDITION. AS ALREADY POINTED OUT, THE ASSESSING OFFICER ON BEING SATISFIED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT CORRECT OR COMPLETE IS ENTITLED TO MAKE AN ASSESSMENT IN THE MA NNER PROVIDE ,IN SECTION 144. SECTION 144 EMPOWERS THE ASSESSI NG OFFICER TO MAKE ASSESSMENT TO THE BEST OF HIS JUDGMENT. IT IS ALSO WELL SETTLED PRINCIPLE OF LAW THAT THOUGH THE ELEMENT O F GUESSWORK WOULD NECESSARILY BE INVOLVED IN MAKING T HE ASSESSMENT TO THE BEST OF HIS JUDGEMENT, YET THE AS SESSING OFFICER HAS BASE THE ASSESSMENT ON SOME MATERIAL. THE ASSES SING OFFICER IN CONSIDERED VIEW, HAS CHOSEN A WRONG METHOD FOR CALC ULATION OF ADDITION JUSTIFIED IN THIS CASE. THE CORRECTNESS OF THE METHOD ADOPTED BY THE ASSESSING OFFICER IS HIGHLY DOUBTFUL IN SO FAR AS THE SALE OUTSIDE THE BOOKS OF ACCOUNT HAS BEEN CALCULAT ED ON THE BASIS OF VARIOUS ASSUMPTIONS THE CORRECTNESS OF W HICH MAY BE DOUBTFUL. WE ARE, THEREFORE, OF THE CONSIDERE D VIEW THAT THE METHOD ADOPTED BY THE ASSESSING OFFICER FOR DET ERMINATION 5 OF THE ADDITION FOR RESPECTIVE YEARS IS NOT REASONA BLE. WE ARE OF THE CONSIDERED VIEW THAT SUITABLE ADDITION FOR ASSE SSMENT YEARS UNDER CONSIDERATION COULD BE MADE KEEPING IN VIEW T HE FALL IN GP RATE AND ADDITIONAL INCOME OFFERED BY THE ASSESS EE IN EARLIER YEAR BEFORE THE SETTLEMENT COMMISSION ON ACCOUNT OF INFLATION OF EXPENSES. IN THESE YEARS, THERE IS A STRONG CASE FOR ADDITION ON ACCOUNT OF INFLATION OF EXPENSES IN SO FAR AS SA TISFACTORY EXPLANATION HAS NOT BEEN GIVEN BY THE ASSESSEE FOR THE ABNORMAL INCREASE IN THE EXPENSES. THE ASSESSEE HAS DISCLOSE D A GP RATE OF 16.1%, 13.7% AND 12.98% FOR ASSESSMENT YEARS 94-95, 95-96 AND 96-97 RESPECTIVELY. FOR ASSESSMENT YEARS 92-93 AND 93-94, THE GP RATE OF 24.7% AND 25.4% RESPECTIVELY HAS BEEN DI SCLOSED BY THE ASSESSEE. IN THOSE YEARS, THE ASSESSEE HAS OFFE RED FURTHER INCOME FOR ASSESSMENT. ONCE BOOKS OF ACCOUNT OF THE ASSESS EE ARE REJECTED, THE PAST GP, IN THE ABSENCE OF ANY OTHER MATERIAL, IS A REASONABLE GUIDE FOR DETERMINATION OF INCOME. THE TURNOVER FOR ASSESSMENT YEAR 94-95 IS RS. 2,92,48,867/- FOR ASSESSMENT YEAR 95-96, RS. 3,93,73,926/- AND FOR ASSESSMENT YEAR 96-97 RS. 4,1 7,22,462/-. IF THE RATE OF 25.4% DISCLOSED BY THE ASSESSEE FOR ASS ESSMENT YEAR 93- 94 IS APPLIED, THERE WILL BE A SUBSTANTIAL ADDITION TO THE DISCLOSED INCOME OF THE ASSESSEE. IF THE AVERAGE RATE OF PRO FITS FOR ASSESSMENT YEARS 92-93 TO 96-97 IS WORKED OUT, IT G IVES A RATE OF 18.6%. CONSIDERING THE FACT THAT WE HAVE NOT APP ROVED THE METHOD OF CALCULATION OF THE ADDITION AS ADOPTED BY THE ASSESSING OFFICER, WE CONSIDER IT APPROPRIATE TO RE STORE THE ISSUE OF DETERMINATION OF PROFITS BY APPLYING THE GROSS R ATE OF PROFIT. IN OUR CONSIDERED VIEW, THE AVERAGE GROSS RATE OF 1 8.6% WOULD BE REASONABLE UNLESS THE ASSESSEE ESTABLISHES THAT LOW ER RATE OF PROFIT WOULD BE JUSTIFIED IN THIS CASE. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE CIT(A) AS WELL AS THOSE OF THE ASSESS ING OFFICER AND REMIT THE ISSUE TO THE ASSESSING OFFICER FOR THE LI MITED PURPOSE OF DETERMINATION OF ASSESSABLE PROFITS FOR THE RESPECT IVE YEARS. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE ALLO WED AN OPPORTUNITY OF BEING HEARD. 13. IN THE SECOND ROUND OF PROCEEDINGS BEFORE THE A SSESSING OFFICER, REASONABLE OPPORTUNITY WAS GIVEN TO THE AS SESSEE TO PUT FORWARD HIS CASE THAT THE GP RATE LOWER THAN 18.6% WAS JUSTIFIABLE TO BE APPLIED. THE ASSESSING OFFICER, ON RECONSIDE RATION OF THE TOTALITY OF THE FACTS, APPLIED RATE OF 17%. 14. THE ASSESSEE IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) RAISED VARIOUS ISSUES INCLUDING THE F ACT THAT THE ASSESSING OFFICER HAD COMPARED THE RESULTS OF THE Y EAR UNDER CONSIDERATION WITH THE RESULTS OF ASSESSMENT YEARS 1992-93 AND 1993-94, WHICH HAD NO RELEVANCE AS THE ASSESSEE HAD MADE DIRECT 6 EXPORT SALES DURING THOSE YEARS WHEREAS NO SUCH SAL ES WERE MADE DURING THE YEAR UNDER CONSIDERATION AND EVEN DURING THE SUBSEQUENT YEARS. THE ASSESSEE HIMSELF HAD FILED T HE TRADING ACCOUNT FOR THE FIVE YEARS I.E. ASSESSMENT YEAR 199 2-93 TO 1996-97. THEREAFTER THE ASSESSEE HAD FILED A CHART SHOWING THE GROSS PROFIT RATE EARNED BY IT DURING THE PERIOD 19 96-97 TO 2006-07 WHEREIN GP RATE RANGED FROM 14.94% TO 17%. THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE PARA 4 HE LD AS UNDER: 4. I HAVE CONSIDERED THE FACTS OF THE CASE, THE S PECIFIC OBSERVATIONS OF THE HON'BLE ITAT SETTING ASIDE THE ORDER TO THE FILE OF THE ASSESSING OFFICER AND THE ARGUMENTS OF THE AR O N THE ISSUE. THE PERUSAL OF THE ORDER OF HON'BLE ITAT CLEARLY SHOWS THAT THE REJECTION OF THE BOOKS OF ACCOUNTS BY THE ASSESSING OFFICER HAS BEEN UPHELD AND THE ONLY REASON FOR SETTING ASIDE THE ASSESSMENT ORDER WAS TO APPLY SPECIFIC G.P. RATE WHICH ACCORDING TO THE HON'BLE BENCH COUL D BE THE AVERAGE OF LAST FIVE YEARS OR A LOWER G.P. RATE IF PROVED BY T HE ASSESSEE. THE AR IN HIS WRITTEN SUBMISSIONS HAS TAKEN A STAND THAT T HE ASSESSEE HAD FILED DETAILED SUBMISSIONS TO JUSTIFY THE BOOK RESU LTS AND THE RELEVANT BOOKS OF ACCOUNTS ALONGWITH BILLS AND VOUCHERS HAD BEEN PRODUCED WHICH HAVE NOT BEEN FOUND TO BE DEFECTIVE AFTER EXA MINATION BY THE ASSESSING OFFICER. HERE IT WOULD BE IMPORTANT T O KEEP IN MIND THAT THE ISSUE WHETHER THE BOOKS OF ACCOUNTS ARE DEFECTI VE OR NOT WAS NOT BEFORE THE ASSESSING OFFICER AS THIS ISSUE HAS BEEN CATEGORICALLY DECIDED AGAINST THE ASSESSEE BY THE H ON'BLE BENCH AS DETAILED ABOVE. THEREFORE AT THIS STAGE THE GRIEVAN CE OF THE ASSESSEE WITH REGARD TO THE REJECTION OF BOOKS OF ACCOUNTS C AN NOT BE ENTERTAINED AS THE ORDER OF THE ASSESSING OFFICER O N THIS ISSUE HAD BECOME FINAL AS THE ASSESSEE DID NOT APPEAL AGAINST THE ORDER OF HON'BLE ITAT. THE ISSUE THAT REMAINS IS THAT WHAT S HOULD BE THE G.P. RATE TO BE APPLIED TO THE TURN OVER RECORDED I N THE BOOKS OF ACCOUNTS AND FOR THIS PURPOSE THE G.P. RATE OF EARL IER YEARS HAS BEEN HELD TO BE A GOOD BASIS BY THE HON'BLE ITAT. IT IS HOWEVER ANOTHER MATTER THAT A LOWER G.P. RATE COULD BE APPLIED IF T HE SAME WAS ESTABLISHED AS JUSTIFIABLE BY THE ASSESSEE. THE ASS ESSEE IN THIS REGARD HAS POINTED OUT NUMBER OF BASIS WHICH DIST INGUISH THE OPERATIONS OF THE CURRENT YEAR FROM THE OPERATIONS OF EARLIER YEAR. FOR INSTANCE THE INCREASE IN THE COST OF PRODUCTION 6'ECAUSJE OF RAW MATERIAL AND ELECTRICITY COST HAVE BEEN HIGHLIGHTED AND AT THE S AME TIME LOWER REALIZATIONS BECAUSE OF FLAT MARKET HAVE ALSO BEEN TAKEN AS THE PLEA. THE AR HAS ALSO POINTED OUT THAT THE GP RATE FROM ASSES SMENT YEAR 1996- 97 TO 2006-07 RANGED FROM 14.94% TO 17% AND THE SAM E WAS DULY ACCEPTED BY THE ASSESSING OFFICER IN ASSESSMENT FRA MED U/S 143(3). IT HAS ALSO BEEN POINTED OUT THAT THE G.P. RATE FOR ASSESSMENT YEAR 1992-93 TO 1996-97 WAS DISTINCTLY HIGHER AS THE ASS ESSEE HAS MADE EXPORT SALES DURING A.Y. 1992-93 AND 1993-94 WHEREA S NO EXPORT SALES HAVE BEEN MADE IN ASSESSMENT YEAR 1996-97. IT IS HE RE THAT THE ASSESSING OFFICER'S OBSERVATION IN PARA 9 AT PAGE N O. 8 SEEM TO BE ACTUALLY WRONG AS THERE ARE NO EXPORT SALES IN ASSE SSMENT YEAR 1994- 7 95, 1995-96 AND 1996-97 AND THE ASSESSEE DID NOT RE CEIVE ANY DUTY DRAW BACK AND CASH ASSISTANCE, WHICH IN TURN DEFINI TELY BRINGS DOWN THE G.P. RATE. THE AVERAGE OF THE G.P. RATE FOR LAS T FIVE YEARS COMES TO 18.62% AS THE G.P. RATE FOR TWO ASSESSMENT YEARS I.E 1992-93 AND 1993-94 WAS 24.7% AND 25.4%. THE UNUSUALLY HIGHER G .P. RATE IN THESE TWO YEARS IS ATTRIBUTABLE TO ADDITIONAL INCOME DISC LOSED BY THE ASSESSEE BEFORE THE HON'BLE SETTLEMENT COMMISSION. HOWEVER T HE G.P. RATE FOR LATER YEARS I.E 1994-95, 1995-96 AND 1996-97 WAS 16 .1%, 13.7% AND 12.98% RESPECTIVELY. THE ASSESSING OFFICER'S AC TION IN ADOPTING THE G.P. RATE OF 17% AS AGAINST 18.6% (AVE RAGE OF LAST FIVE YEARS) IS BASED UPON THE DIRECTIONS OF THE JCIT U/S 144. NO SPECIFIC REASON HAS BEEN GIVEN FOR APPLYING THE G.P. RATE OF 17% AS AGAINST 18.6% BY THE JCIT AS WELL. I AM OF THE VIEW THAT TH E G.P. RATE OF THE FOLLOWING YEARS NEEDS TO BE TAKEN INTO CONSIDERATIO N TO DETERMINE THE AVERAGE ESPECIALLY WHEN SPECIFIC REASONS FOR LOWER G.P. RATE HAVE BEEN GIVEN AND NO FAULT WITH THE SAME HAS BEEN POINTED O UT BY THE ASSESSING OFFICER AND THE G.P. RATE OF THE EXCEEDING YEARS HA S BEEN ACCEPTED BY THE ASSESSING OFFICER IN ORDERS PASSED U/S 143(3): ASSTT. YEAR G.P. RATE 1995-96 13.70% 1996-97 12.98% 1997-98 14.96% 1998-99 15.70% 1|999-2000 15.90% AVERAGE 14.64% THEREFORE, THE G.P. @ 14.64% ON TURNOVER OF RS.3,93 ,73,926/- AMOUNTS TO RS. 57,64,342/-. THE DECLARED G.P. AS PE R BOOKS IS RS.54,00,843/- WHICH MEANS THAT ADDITION OF RS. 3,6 3,499/- DIRECTED TO BE CONFIRMED. 15. THE PERUSAL OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) REFLECT THAT THE AVERAGE OF GP RATE OF AS SESSMENT YEAR 1995-96 TO 1999-2000 WERE WORKED OUT AT 14.64% AND THE SAME WAS APPLIED TO THE TURNOVER SHOWN BY THE ASSESSEE I N ORDER TO DETERMINE THE ADDITIONAL INCOME IN THE HANDS OF THE ASSESSEE. THE SAID EXERCISE OF APPLICATION OF GP RATE OF SUCCEEDI NG YEARS WAS CARRIED OUT AT THE BEHEST OF THE ASSESSEE WHO HAD S UBMITTED THAT THE GP RATE OF FINANCIAL YEAR 1994-95 TO FINANCIAL YEAR 2006-07 SHOULD BE APPLIED IN ORDER TO DETERMINE THE NET GP. IN VIEW OF THE ABOVESAID FACTS AND CIRCUMSTANCES, WHERE THE AS SESSEE HIMSELF 8 HAD ASKED FOR THE APPLICATION OF AVERAGE GP RATE OF THE SUCCEEDING YEARS TO THE FACTS OF THE CASE, IN ORDER TO DETERMI NE THE ADDITION IN THE HANDS OF THE ASSESSEE, WE FIND NO MERIT IN T HE PLEADINGS OF THE ASSESSEE. THE ASSESSEE HAS FAILED TO BRING ON RECORD ANY EVIDENCE TO PROVE THAT THE GP EARNED BY IT WAS LESS THAN 14.6% ADOPTED BY THE ASSESSING OFFICER AND IN THE ABSENCE OF THE SAME, WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE THAT L OWER GP RATE SHOULD BE APPLIED IN ORDER TO DETERMINE THE INCOME IN THE HANDS OF THE ASSESSEE. THOUGH THE ASSESSEE HAS RAISED THE I SSUE OF REJECTION OF THE BOOK RESULTS UNDER SECTION 145 OF THE ACT BUT WE FIND NO MERIT IN THE SAID CLAIM OF THE ASSESSEE AS THE TRIBUNAL HAD UPHELD THE REJECTION OF BOOKS OF ACCOUNT AND HAD RE STORED THE ISSUE OF DETERMINATION OF THE NET PROFIT RATE TO BE APPLIED TO THE INSTANT ASSESSMENT YEAR. IN VIEW THEREOF, THE FIRS T PART OF THE GROUND OF APPEAL RAISED BY THE ASSESSEE AGAINST THE REJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145 OF THE ACT IS DI SMISSED. 16. THE SECOND ISSUE RAISED BY THE ASSESSEE IS AGAI NST APPLICATION OF THE GP RATE OF 14.64%. THE PLEA OF THE ASSESSEE BEFORE US WAS THAT THE SAID RATE APPLIED IN THE HAN DS OF THE ASSESSEE IS ON THE HIGHER SIDE. HOWEVER, WE FIND T HAT THE COMMISSIONER OF INCOME TAX (APPEALS) WHILE DETERMIN ING THE GP RATE TO BE APPLIED IN THE HANDS OF THE ASSESSEE HAD CONSIDERED THE PLEA OF THE ASSESSEE BEFORE HIM THAT THE AVERAGE OF THE SUCCEEDING YEARS MAY BE APPLIED AS THE FACTS OF THE PRECEDING YEAR WERE NOT IDENTICAL TO THE FACTS IN ASSESSMENT YEAR 1995-96. IN THE TOTALITY OF THE ABOVESAID FACTS AND CIRCUMSTANCES, AND IN TH E ABSENCE OF THE ASSESSEE HAVING BROUGHT ON RECORD ANY EVIDENCE TO PROVE THAT THE GROSS PROFIT EARNED BY IT WAS LESSER THAN THE A VERAGE SHOWN IN 9 THE SUCCEEDING YEARS, WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE THAT LOWER GP RATE MAY BE APPLIED. THUS, GROUNDS O F APPEAL RAISED BY THE ASSESSEE ARE DISMISSED. 17. THE FACTS AND ISSUES IN ITA NO. 433/CHD/2013 AR E IDENTICAL TO THE FACTS AND CIRCUMSTANCES RAISED IN ITA NO. 43 4/CHD/2013 AND OUR DECISION IN ITA 434/CHD/2013 SHALL APPLY MU TATIS- MUTANDIS TO ITA NO. 433/CHD/2013 ALSO. 18. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH SEPTEMBER,2014. SD/- SD/- ( T.R.SOOD) (S USHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED:.10 TH SEPTEMBER,2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR ITAT/CHD